The problem is the real estate market isn't very liquid in the best of times, especially when compared to the stock market, and now it's ridiculous.
Could anyone really afford their first house and furniture at the same time? I couldn’t. Now my mortgage payment is equal to my car payment. I don’t know what my house is worth and neither will anyone else until my wife and I are gone and it gets sold.
The problem is with speculators. The housing bubble was basically a ponzi scheme. Those that flipped early and often made tons of money. The ones that got in late took it in the shorts. Mortgage companies jumped in with both feet using the inflated values of the homes as the assessed value. My brother made money and lost money. One of his lawyer buddies put 10% down on 10 $1,000,000 condos in Florida (new construction). He just walked away and let the bank take them back. That’s the problem. This was NEW construction based, not on the demand for housing, but pure speculation. It will take 10 buyers to purchase the units that this bozo ordered. He lost a ton. The bank lost a ton, but the builder made a fortune. Money doesn’t disappear. It just moves around.