Michael Hill says Don't Blame Subprimes

From Don't Blame Subprimes:

"Today's crisis differs greatly from previous housing downturns. In past downturns, the housing market was influenced by and was an indicator of other economic issues. This time, millions of homes have been built around the country during the past few years using a financing option that no longer exists. There may never be enough capacity to absorb all of these homes and other existing homes using 30-year mortgages, because there simply aren't enough people with the incomes to meet the requirements. Prices could not roll back far enough without damaging the economy irreparably."

Does this mean the entire real estate/housing market is fundamentally weak? Is there not a government that is supposed to regulate this? How foolish of me, the Republicans have been in charge of dismantling government for the people, of the people, and by the people in favor of the paymasters.