The market was as over valued as home prices were prior to the crash. If you expect it to correct itself to that point in short order you’re kidding yourself.
Not at all. Simply the idea that the market could stabilize itself back to an equilibrium. One, that may not happen as a sharp downturn could change certain market dynamics making an undesirable condition the new equilibrium. And two any such correction could take several months or years.
The overvalued home prices were an example of the market being seriously out of equilibrium.