[1stLand]

A 20% drop in prices is not out of the question, but something drastic would have to occur, like another economic meltdown, job losses, and a significant jump in interest rates.

I have seen plenty of listings out there that have dropped in price over 20%.
Does this mean the market has come down more than 20%? More often than not it meant their initial list price was way out of whack.

I just purchased a Condo (Foreclosure) and negotiated $16,000 off the price. Between what I bought it for and what it was initially listed at this past March, there is a $40,000 spread.
If you go back further and see what it was listed at in 2007, there is almost a $100,000 spread.
Could the value of that condo go down further? Ofcourse.

As long as I can rent it when I decide not to live there anymore and have mortgage and expenses paid for with a little cash left over I am happy.

That is the philosophy many of people are adopting out there.
Many times I have left listing appointments empty handed because the value of their home is far less than their mortgage. 4 or 5 of these houses I visited have turned into Rentals, because the owners had to relocate and refused to take a $30,000 to $50,000 loss.

So for the people out there waiting for the other shoe to drop and prices to come crumbling down in excess of 20% because current home prices are 'overvalued', I advise you that people are very resistent to lose money on their homes.

Significant Job losses in the economy or drastic rise in carrying costs (interest rates) are about the only likely catalysts out there that will bring about a wholesale drop in Prices to the extent it could be referred to as "A Bubble Popping"