One of the oddities of the standard narrative of the Housing Bubble is how it glosses over just how regional it was. In large expanses of America, there wasn't much of a Bubble at all. The New York Times reports on the economy in North Dakota, where there was no Housing Bubble, no subsequent Mortgage Meltdown, and no Financial Catastrophe ... so far.
I suspect that North Dakota is, like everywhere else, in for hard times and that it's current prosperity is an afterglow of the now vanishing Commodities Bubble of 2007. When the Fed discovered in the middle of 2007 that the economy had become a house of cards built on subprime and/or pay option mortgages in the "Sand State" (FANC — Florida, Arizona, Nevada, and California — as in "FANCs for the mortgages, suckers!"), it created a lot of money to try to head off recession. That new money, with nowhere else to go, flooded into commodities, causing oil to hit ridiculous prices last summer (so ridiculous that even I wrote about them), and inflating a lot of other commodities such as grains.
Nonetheless, North Dakota still has a big long-run advantage: a high ratio of land and resources to people. Ben Franklin pointed out in 1751 that this is exactly why life was happier for the average person in America than in Europe.
More than anything else, the Housing Bubble was a bet that rapid Hispanicization of the population of the Sand States was compatible with high and continually rising home prices. This meant, in effect, that either Hispanics could earn enough money to pay off these huge mortgages or that they could find Greater Fools willing to pay even more money to live amidst ever increasing numbers of Hispanics.
As we can see now, neither assumption has proven valid. Home prices in the Sand States are dropping like a stone back to levels at which the increasingly Latino population might possibly be able to afford.