"so you think another bubble will follow this bubble? thats very optimistic."
Your words not mine. Overall market will more than likely stagnate for perhaps around 10 years making property more affordable, then yes the cycle will likely repeat.
"if home loans hit 10% and property prices fall 40% then $300K homes become $200K homes.. at 10% thats manageable, especially when the future rates will be going down after"
Talk about trying to have your cake and eat it. First you say that we will have higher interest rates for an extended period of time (which will create mass unemployment) which these same people will miraculously be able to afford the 1/2 price homes, then just as soon will be followed by lower rates. So lets see 1st they should not own now, 2nd they should wait for property to be 1/2 price where they want to buy and 3rdly they will time their buy such that rates quickly drop after their purchase - good luck with that delusion as most will not make that timing!
Also you are under the assumption that even with home prices dropping allot of the buyer will still spend more than the $200k as they will buy a more expensive home just because they deem they can afford it!
