The Housing Flu has spread from the three sickest hosts to the rest of the country, says a new report by Global Insight, a financial analysis firm.

Among the most comprehensive of the home price analysts covering 84 percent of all housing units, the House Prices in America report covers 330 housing markets, 262 of which experienced declines in the first quarter 2008. Most of the contagion is in California, Florida, and Michigan where 45 of the 50 worst performing markets are located.

Flu can be miserable, and there's no question that most of the country is feeling the symptoms. Home prices dropped 6.7 percent in the first quarter 2008, mostly due to overpriced areas being put to bed to rest.

Five symptoms need to get better before housing is healthy again -- price, credit, expenses, supply and foreclosures.

Price is already well on the road to recovery. In 2006, Global Insights found that 53 markets were overvalued. By the end of March, only eight housing markets were. Researchers say that the Northeast and coastal California and Florida are now fairly valued.

The next biggest hurdle is credit. Banks are currently looking at more than credit scores and housing comparables -- they're looking at how long homes have been on the market, and disregarding individual features as relevant to price. The pendulum has swung the other way in credit with lenders saying yes only if the loan is insured by Fannie Mae, Freddie Mac, PMI, or other third-parties. They've also all but shut down equity lines of credit, and if a homeowner is planning to rent a home and rebuy, the bank wants more than a signed lease - they want proof that utility bills have been transferred to the tenant's name.

These requirements aren't unreasonable, they are just unexpected by homeowners and buyers used to getting what they want.

It will take time for bad loans to be spun into good loans.

Tight household expenses are depressing consumers. Gas and food doubling in price since the housing boom says it all. When those come back down, consumers can breathe a sigh of relief.

Excess supply. Nationwide, housing is at about 11 months on hand, which means it would take that long to sell every house on the market if no more listings were added.

Last, foreclosures are up. According to RealtyTrac, banks will seize about 60,000 properties a month through December 2008. By then, about 1 million U.S. homes, or a quarter of all homes that are for sale, may be bank-owned.

Flu is a virus that simply has to run its course. It doesn't respond to antibiotics, and housing won't respond to quick fixes either, but it will respond to the greatest healer of all -- time.