Seems to me like they all started happening in sync. I think it was the Wall Street meltdown that started the downward slide.

People using their artificially overvalued homes as ATMs came first.

It is a matter of causation. The impact and timing varied by geolocation.

What came first???? - going away from the gold standard or any other form of having our money backed by something more than a promise. If our system was backed by something - the natural and basic laws of economics would be fairly easy to deal with - this fiat systems is much too easy for those with something less than the greater good in mind to manipulate.

Here's how I saw it:  Shite loans and lending to those unqualified was the first thing.  Then the recession started, then the slowdown, then people were left with homes they couldn't afford and adjustable rate mortgages that were coming due (often with balloon payments) in less than a year.  Many walked away, which caused the banks to have issues, which cause the mortgage backed securities on wall street to tank, which lead to the rest of wall street having issues, which lead to the recession which turned into an unacknowledged depression.

1, 3, 2

The recession was CAUSED by the housing issues, not the other way around (housing usually does great, relative to other investments, in recessions)

In the past, foreclosures weren't that big a deal because banks could recoup losses through home sales.  With 100% financing products, there was no equity to recoup.  And there was a glut of supply and no demand.  A recipe for disaster.  Check out the months of supply VS demand then VS now:

1. The Wall Street to Banking meltdown hit San Diego-the affect felt like almost over night. We were not in a recession yet and the market went hot to cold suddenly.

Depends on who you are talking to.

I noticed #3 first, anything above 400K in my area was not selling. Listings dead in the water.

Then #1 imploding our entire monetary system. People that should be in jail from this still aren't.

#2 (ironic) because of #3 and #1.

A domino effect.

Unchecked actions first by individuals & then collectively like a lynch  mob

The crazy easy money came first.  Then the house of cards came tumbling down.

all the S_ _ T hit the fan at one time....

No clue Peter Mohylsky BECAUSE North Dakota did not participate. While the rest of the USA was in the dumpster our oil boom happened and people were flocking here for employment.

Each is an unfortunate occurrence.

1 Subprime mortgage.

Government policies to fundamental change the US to a more socialist way started. Wall street, banks and business stopped spending money. Health care became unaffordable for many who had great insurance before. Gas prices went up taking most of a families extra income. Unemployment started to rise quickly. Banks stopped lending. When buyers cant buy, sellers cant sell and prices started to drop. Sellers, mostly who had 80/20 loans and nothing to lose as they put 0 down, walked away from their homesnow worth way under what they owed. Foreclosures lead to more foreclosures. The government bailed out banks slowing down foreclosures and extending the pain. 

One, three, two. The practice of securitizing loans created too much greed and many responsible were never punished.

Peter, have you seen The Big Short?

great explanation of the melt down, the products and players that caused it.

Plus an exceptional all-star cast - Christian Bale, Steve Carell, Ryan Gosling, Brad Pitt

We have to cope with any situation.

mortgage banking.  reos came first, cheap houses came, builders put out of business because so many reos, builders business loss spead to rest of economy and recission happened.

A slow-down first - then the mortgage/banking melt-down, followed by a total recession.

Recessions happen - that last one was a doozie BECAUSE of the vast amount of bad paper that was sold by the banks...and if you want to get down to the nuts & bolts of it, the freedom that ANY American had to own a home. Banks gave that to them, thanks to a president who insisted that EVERYONE has the God-given right to own a home...and we should all make that happen. BIG mistake...and so the spiral began! 

It all started with Wall street and selling off huge packages of what they knew were bad BAD loans.....the rest is history.

Seems like everything happened simultaneously!

Let's hope we are NOT heading in the same direction again.

It was a bad memory.

You seem to imply that "this time" will have some sort of similarity to "The last time". I would strongly disagree! The real estate market is due...overdue...for a correction. It will be part of the normal cycle of ups and downs in the market. It will in no way resemble the depression of roughly 2008-2012.

What came first? Bank of America influencing MOODY's to give AAA rating to investment instruments they KNEW were toxic. They KNEW these toxic assets would be off-loaded to the taxpayer. They in essence created counterfeit money and left the last holder with the liability.  And the other banks piled on because it was clear no one was looking and the money to be made incomprehensible.

A banking system based on counterfeit value leads to your #1.

And no big bank crook went to jail. And banks continue to augment their #1 money maker.....penalties and fees.

#3, Peter Mohylsky 

Good question and I am enjoying the answers

definately it was bad loan being made and LOTS of them.

Katrina was the shock that started it all.