Any asset wordwide that used leverage by the consumer or speculator to buy or speculate on, is undergoing a revaluation. The governments around the world will try to legislate incentives to make sure the deflation is orderly until the supply/demand, risk/reward, and discounted cash flows bring prices back to a "real value" instead of artificially inflated values.
Business, consumers, and governments are having to clean up their balance sheets and will have to adapt to the coming new world of increased regulation and taxation.
Clearly the arena of second homes is spearpoint of overvaluation, overleverage, and yes overindulgance that the consumer/speculator produced.
Looking at Josh's charts, IMHO, that barring the creation of some artificial legislative incentive ( i.e. tax credits or tax free access to I.R.A. s) for second
home ownership, prices should stop at the inflation adjusted pre-bubble long term prices (this would work out to be around $180 per sq ft)
Meanwhile you are probably right about how long it would take to sell existing inventory. long long long...time
