How (and why) should a HouseWatch be set up? Is it feasible, and would it be a good idea? Please edit - these are just ideas.

1) Housing bubbles are worse than production investment bubbles. (elaborate below).
2) Renters are rational consumers, while house buyers are rather irrational.
3) Using rental data, you can easily determine a rough estimate of the underlying value of basic housing in a postcode.
4) Releasing data on the underlying value of basic housing in a postcode would deter housing bubbles

Expanded:
1) a) Production booms are good, because they encourage investment in productivity. Product (i.e. house) booms are bad because they do not encourage innovation. For an analogy, a boom in car manufacturers would encourage car manufacturers to create innovative new cars and manufacturing methods to attract speculative investors. A boom in car assets would mean mum and pa speculators would buy a Hummer H2 to "get in while they can". McMansions? aren't much different.

b) Houses are vital. Messing with the market for houses kills people. Period.

2) Renters are driven by supply and demand (as God and Adam Smith intended), while speculators are driven by irrational exuberance and the availability of cheap credit. Renters don't think that using marble topped toilets will make them millionaires. Speculators do.

3) This will not include speculative value in land, or premiums on better houses, but investors should be aware that these are not value investments anyway. There are some technical considerations to this (due to temporary rental peaks etc), but price to earnings is a good indicator of value. Except in the case of dotcoms (whoops, bankrupt), Enron (whoops), B&B (you get the picture - accrual accounting is not the investors best friend).

4)If you present speculators (most of whom can't calculate compound interest) with an internetty web-based tool to calculate the base value of houses in their postcode (based on rents for the last few years), you will ensure that only genuine investors bother to enter the market. Speculators can the put their punts on Greentech, Biotech, agriculture, mining, financial services, mobile phone companies, or some other industry, helping to create jobs and progress.