As for the 'prolonged' slump, it's not anything new. The same thing happened in the late 80's. We had just bought our home in mid 1988 when the downturn began. It seemed like it was early in 1992 before the values started rising again. The drop in 1988 was proportional to the most recent one. We 'lost' about 20% off our purchase price in the previous slump, and this time, based on recent sales on our street, of homes that haven't been updated, the reduction in value is about 15%
That is not even close to true. That there was a genuine market bust as opposed to a temporary slow-down was not clear until after New Year 2008. It was only a couple of months ago that the NAR capitulated and admitted that there was a real problem. There are plenty of speculative developments being completed even now as we speak in DC. Large developments have lead times of years and enormous quantities of sunk costs. Failure to complete and you lose not 30% of your final expected sales price, but ALL of your money. Land with abandoned structures becomes almost worthless because of the cost of clearing the land and cleaning it up to make it suitable for some other purpose.