“Actually many people have been living in virtual world(or virtual reality) for several years. Now it is unplugged.”
Not if you can hold it long enough. Real estate is forever, only those who buy needing to get out in a short period of time are doomed.
If you can hold it long enough you generally will not lose money. Patience and research is the key. Real estate is forever, man’s patience is not.
Don't forget those who borrowed for homes they could not normally afford, encouraged by predatory lending and the conventional wisdom that housing prices would never fall. Housing prices never being allowed to fall is part of the basis on which our economy has been managed.
The liquidity crunch we are watching progress was never supposed to be possible, and there is no "plan B" for this situation. Thus the spectacle of Bernanke contradicting himself so often, and the impotence of the normally potent set of financial levers at his disposal.