The govt cannot afford high interest rates and want inflation to help their debt problem. I think price levels are just resetting. I do thing real estate is going to cool off and I actually think "real" prices adjusted for inflation go down. I don't think nominal prices are going to go down much if at all. I actually think they keep increasing but not at the rate of inflation. So if you are expecting a 50% drop in nominal prices I would be shocked. I don't think real estate keep up with inflation and the popping real estate bubble will be masked by inflaiton.
I don't think people should over extend for a house right now and there are certainly going to be better investment over the next few years. Not sure what those are but the I don't think it is the stock market.