If Housing drops even 10% thats huge to someone who wants to move. If they buy a $1 Million dollar home and can only sell it for $900,000 they owe $100,000 or they just can't sell.
Its this factor that keeps the housing bubble from busting. People cant panic because they can't pony up the money for the loss.
Unless they just walk away from their house, like many did in the early 1990s.