I'd say considering how high prices have move the past couple years, prices would have to drop by at least 20% or more for it to be considered a collapse of any kind.
I tend to agree with you, but I would add the time element: I'd say [absolutely arbitrarily] that a drop of >30% with a recovery time of longer than 5 years to the present levels would be a collapse, and probably a collapse would take more than that. Do we call DOW drop from March 2000 a "collapse"? From 12000 to 7500 [37% drop] and now back at 11300 - all numbers rounded. Either a smaller drop or a shorter recovery could be classed as a hiccup.
That would only erase one years increase in alot of areas, that is very likely. But what does it really mean to you and I? Little unless you are highly invested in a loan servicer, or own alot of mortgage backed securities. Ex-Texan if you are so certain, you should go out and find a vehicle to short mortgage backed bonds. All real estate increases have corrections. Fannie Mae just added a 40 amortization option to take some pressure off.