HUD is offering at least 120 houses in Cleveland for sale at $1 each. I don’t think fiscal stimulus will fix this, but it does help to answer the question of how low can home prices really go.
Interested in a glimpse of things to come? Cleveland’s housing bust started early – read here Mother Jones’ “Prime Suspect” — a compelling description of life in Cleveland’s Slavic Village area was already like in 2006. This may be what neighborhoods all over the U.S. will be like as housing prices decline: http://www.motherjones.com/news/feature/2006/09/prime_suspect.html