Yes, I believe the real estate market is well along in its cyclical
self-correcting mode. The primary issue today is oversupply. Builders
will continue to do whatever it takes to reduce inventory and get
construction loans paid off so they can become prepared for the
inevitable next wave.
Prices are important but secondary to oversupply. Prices were moving
too much faster than income. If the Fed finds that the economy is in
danger due to real estate market conditions it will lower their
already low interest rate to stimulate the economy. This will allow
yet another wave of refinancing.