This is the conclusion of the article in The Econoimist which computes prices/rent.
The first graph shows the current price/rental income in USA, UK, Spain. USA is almost at fair-value. UK is still about 28% overvalued.
Spain is 55% overvalued so a future 30% decrease would only bring prices in line with rental income.
The market usually overreacts in both up or down directions…
http://www.economist.com/businessfinance/PrinterFriendly.cfm?story_id=15179388