What Happens if the Market Crashes?

While most of us are still hoping the market continues to go up, up, up... others are planning a strategy if the market suddenly goes down, down, down. Yale economist Robert J Schiller in his new book "Irrational Exuberance" believes that home prices in some markets are reminiscent of stock prices before the crash of 2000. He believes that many markets that have seen speculators driving up prices may see downturns if investors can't turn properties quickly for a profit.
Many believe that the market can only go so high before buyers "just say no" to overpriced properties in some speculative areas of the country. People who see this coming fairly soon are selling now and putting cash in the bank to "snap up" the opportunities they believe will soon exist in some of the over heated markets.. especially Nevada, Arizona and Florida.
A word of warning.. if you are planning on buying that Strand property for $500,000 instead of the current $4,500,000+ when the market cools you can probably forget it. While prices in the Beach cities may slow a bit it is very unlikely we will see any major price declines. Most of the property being purchased in our area are owner occupied homes not speculative properties bought for a quick turnover. Interest rate increases will trigger a cooling more then speculation as prices continue upward. In the South Bay prices will slow when potential buyers just can't qualify for homes. That is when the market will make an adjustment in prices until the pool of prospective purchasers once again increases.
Of course if I could predict exactly what would happen I would be writting a best selling book and retire rich and famous....