Check out Manias, Panics and Crashes one day

Here's pieces of a good recap on Amazon. I read the book almost two years ago - it's not about the housing bubble, more general, but of course fits the housing bubble to a T. I sold my house as fast as I could after reading this book, then reading the Phoenix inventory and sales numbers.

Speculation excesses are referred too as mania and revulsion from these excesses take the form of crisis, crashes, or panic which are historically common. The excess speculation builds as investors seize new opportunities for profits and are overdone.

Banks artificially increase supply without proportional increases in demand by expanding the money supply that demand would have generated. The money supply expansion is notoriously unstable. Feedback fuels Euphoria for price increase; the Euphoria turns investment from really valuable products to delusional ones.

Boom is fed by expansion caused by bank credit; credit increases the money supply and destablizes the investment.

Once the excessive character of the upswing is realized, the financial system experiences a distress and then rushes to reverse expansion resembling panic: real or financial assets converting to money, premature repayment of debt, and prices crashes in commodities.

Revulsion of the commodity halts banks from lending on the commodity as collateral, this is called discredit. Discredit leads the panic as people crowd to get out the door.

Banks fail when too many borrowers default on their loans and the borrowers collateral is not enough to cover the debt.