David Lereah and the rest of his buddies at the National Association of Realtors must think our minds have popped along with their precious real estate bubble when they said that the boom is over, but the market should not expect big drops in real estate prices.
The market has witnessed speculative frenzies come and go, and history tells that when a bubble pops, it results in dire economic circumstances. If this sounds unbelievable, you can ask anyone who was around in Japan when the housing bubble burst in the early 1990s.
In the 1990's, prime Tokyo real estate was going for around $139,000 a square foot. What followed was a crash in their stock market and economic stagnation for over a decade when their bubble burst. Just because there is sunshine and there are beautiful beaches doesn't mean it can't happen in the United States.