Ever hear of pushing on a string? When Japan's real estate bubble popped, they lowered their rates to zero which attracted exactly zero new demand for real estate.
Japan's problem was a huge amount of non-performing loans which were never written off. Therefore, the comparison isn't valid.
It's too bad Japan didn't drop its confiscatory tax on real estate "gains", instead.
That tax means that every home-seller ends up with less money to buy a "replacement house". As a result, most home-owners stay put (in spite of zero low interest rates) and endure multi-hour commutes.
Small houses. Long, body-numbing commutes. Hmmmm...
Does this explain Japan's falling population?
Incidently, Japan's "housing bubble" was driven by a shortage of supply (qv: Japan's confiscatory real estate transfer tax, referenced above). A "market" with few transactions is (unsurprisingly) very volatile.
I'd like to think that you know that market conditions in the US are significantly different from market conditions in Japan.
But I don't...
We'd better hope it doesn't get that far because Japanese real estate is down more than 50% over the past 15 years.
That just wouldn't be tolerated here we are not a nation of savers and the Fed abhors deflation.
BUMP