The current issue of the Atlantic has a short article on housing prices, with a map showing the state of values in the top 140 markets. A team of economists (at one of the Ivy League schools, I think, don'thave it in front of me) coded them as overvalued, normal, or undervalued based on local incomes and other factors.

The top 60 or so of 140 were "overvalued" to some degree, but only about 25 "greatly overvalued". Those seemed the only likely "bubble" candidates. The single most overvalued area was central and south Florida, followed by California and the Northeast (actually more so in smaller cities like Portland, ME than NY or Boston, due to the very high incomes in those cities).

The only areas that were "greatly undervalued" were, consistent with the previous poster's anecdote, in the Rust Belt, especially cities not actually on the lakes, like Cinncinnati and Indianapolis. I have a friend who just bought a house in Cinncinnati, and I can confirm that prices there are ridiculously low even compared to Kansas City (where I live). You could certainly buy a house for less than a Lexus.