I was cured of the delusion that house prices never go down back in 1964 when I was a teenager. My father made a job related move from one metro area to another, and had to sell the house for a loss of several thousand dollars, due to a slump in the housing market of our former residence at the time he put it on the market.
I strongly doubt if the current slump will mirror Japan's, but given the prevalence of "crazy" mortgage products, the stagnation of household income, and the large number of marginal to very weak borrowers who have been shoe-horned (very temporarily) into 'home-ownership' with subprime mortgages, many of those who are forced by circumstances to sell in the next couple or three years are likely to have our family's unpleasant experience.
"Two rooms that were each about 12 square feet"
Big difference between 12 square feet (a 3' x 4' closet is 12 square feet) and 12 feet square, which would be 12' x 12' (144 square feet). I suspect the author meant 12' x 12'.