Sounds like Arizona. Or Florida. Or Spain. So why are Arizona and Florida in much, much better shape than Spain is today, despite roughly equal housing bubbles, VoxEU asks? There are lots of reasons, and they all begin with "f" and end with "ederal government."

Let's start with the banks. Arizona and Florida don't have to bail out their own banks. Spain does. That's because the United States has the FDIC and Europe has nothing. This lack of a banking union doesn't just bankrupt countries -- though it certainly does do that -- but also sets back housing recoveries. Think about it this way. If you ran a Spanish bank sitting on top of a portfolio of toxic mortgages -- say, Bankia -- and you knew the government couldn't afford to bail you out, what would you do? You'd pretend the losses didn't exist. In other words, not recognize how far housing prices need to fall. And that's precisely what Spain has done.

The chart below from VoxEU compares housing prices in Arizona, Florida and Spain since 2000. All three boomed. But only Arizona and Florida really went bust. That's not because Spanish prices have fallen enough -- S&P reckons they need to decline another 25 percent or so.

Eventually, the game of pretend has to end. That will be bad news for Spain's banks, but good news, eventually, for their construction sector. With housing prices still far too high, there's no incentive for builders to build. Contrast that to Arizona, where there are finally signs of life in the long-moribund housing sector.

Zombie banks don't eat people. They eat recoveries. Just ask Spain.