I have about three or four drafts going at once (AIG, Banking System in the US, ...) but wanted to get this important graph up now.  From this article at seeking alpha (Hat Tip to Steve) which references the Wall Street Journal:

 
OK - so notice that they project into the future - September 2009 as the "return to average," that is the average of median price to median income.

So the ratio of 'single family home' price to income AVERAGES around almost 3.  Buying a house that is 3 times your income is average.  If you go much above this, you are a risky bet.  Nationally, we allowed ourselves to get extremely risky.

HOWEVER, the banking crisis is NOT the only part of our economy that is in recession.  The Asian Markets were ALREADY recognizing that the "Bailout" was ONLY for Wall Street.  The U.S. economy would still continue to be limping along, at best.  The "Bailout" was ONLY meant to free up credit, not increase housing prices:

The plan "will not jump-start lending, as house prices appear likely to keep falling for some time,'' Ian Morris, chief U.S. economist at HSBC Holdings Plc, wrote in a note on Sept. 26. "The beneficial effect of the rescue package will only be a small, partial unwinding of the earlier tightening of financial conditions.''  (Bloomberg.com here)

So HSBC raised their lending interest rate by .5% in Hong Kong on Monday, Sept. 29 to reflect these credit conditions.  The Asian Markets were down about 2% in response (except here in China, where they are closed to celebrate the beginning of the Communist Chinese era ALL WEEK and Taiwan, where they were closed because of the Typhoon!!)