> let reality hit a few folks in the face, wait for those prices to drop. I don't think house prices will drop until there's a pressure on home owners to sell.

> let reality hit a few folks in the face, wait for those prices to drop. I don't think house prices will drop until there's a pressure on home owners to sell. The two biggest reasons I can think are: - People with ARMs unable to make payments - People losing jobs I remember well that, despite the many foreclosures in 2008, people that had no explicit reason to sell would hold on their homes for years until they were above water again. I distinctly remember houses going on sale, then going off market, over and over again until the owners could walk away at least without a loss. As long as unemployment is low and not too many people got an ARM, I don't forsee this market undergoing a rapid correction.