In reality, the real estate market is already starting to crack, but could begin to accelerate as soon as this month. A catalyst for this (and decline in the stock market) is what's happening this month in Japan. Japan's banks are being forced this month by the government to mark to market on their loans, most of which were secured with stock in the Nikkei. Now that the Nikkei has collapsed, most of that stock is worthless. When the banks mark to market and have to show what in today's environment the holdings are worth, they are going to be doing whatever they can to raise cash. That will include selling off foreign holdings (read: U.S. equities and real estate). The Japanese government has set the deadline for the banks to mark to market for this month. As far as knowing when the worst is over, it will be when the news is worse than you could ever imagine and there is still "blood in the streets". No one can time the exact bottom, and if you jump in a little early you'll still make out great, as over the long run real estate has nowhere to go but up (considering the population keeps growing exponentially but the amount of space to hold it remains the same).