Oil Prices and the Housing Crash

What caused the Great Crash of 2008?  The proximate cause was the collapse of house prices.  Why did house prices collapse? There is an interesting post over at Freakonomics which suggests that the collapse in US house prices was triggered by the large increase in gas (petrol) prices in 2006-7, which dramatically increased the cost of commuting from the suburbs.  The full paper is available here.  However, the increase in gas prices was only a trigger, and  it cannot explain the extent of the fall in house prices in the USA, Ireland, UK, and other economies.   

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