Using detailed micro data at the ZIP code level, this article explores the regional variation in housing market performance to account for the severity of the Great Recession. The granularity of the data, relative to a more traditional analysis at the county level, is useful for evaluating the performance of the housing market because credit and local macroeconomic variables are tied to housing valuations. The deterioration of the ability to transact (buy and sell) housing units, often referred to as housing liquidity, is an important link that connects housing outcomes with real and credit variables. The data indicate that the timing, severity, and duration of the recession varied across regions and was closely connected with the behavior of the housing market. The deterioration in housing liquidity was uniform across all house price tiers (i.e., bottom, middle, and upper end). Furthermore, there was correlation across areas between the magnitude of the declines in housing liquidity and the severity of the deterioration in house prices and macroeconomic conditions.