You bring up a good point about the last 8 years seeing home prices skyrocket. The economist Robert Shiller produces a telling graph of home prices over the past 100 years. It shows very clearly how out-of-whack the recent runup in prices has been.
(2nd bullet) – http://www.irrationalexuberance.com/

I agree with your last sentiment too. Unfortunately, financial memory is quite fickle for most. But I think this bubble was so bad that 15 or 20 years won’t be enough time to make a change. I still hear people telling me they would rather “put money into their own home than throw it away on rent” regardless of the economics behind it. Would you want to “put money into your own home” if you knew it was going to drop 10% in value? 20%? 50%?

I think attitudes regarding a home as a surefire investments are going to change over the next several years and stay that way for a long time.

I couldn’t understand how people were affording to buy homes at the prices they were going for well before the peak, as I suspected many people didn’t have the income to afford their current payments let alone the readjusted payments.

All this is a painful moment financially for many people, most of us have a very short memory and I think we amy see the same problem in 15 to 20 years.