The historic boom and subsequent decline in the nation’s housing market has been a defining feature of the current recession. The housing downturn has been most acute in four states—Arizona, California, Florida, and Nevada— that had experienced some of the highest rates of home price appreciation in the first half of the decade. While these states are not all contiguously located, their similar housing cycles and abundance of either beaches or deserts have led some analysts to label them “Sand States.” This article discusses the factors that led to an expanding housing sector in these states and the market imbalances that culminated in a sharp correction in home prices. The article also explores the ripple effects that the housing downturn has had on the local economies.
Last Updated: November 19, 2025