Early 80's was really bad. What also may hurt a quick rebound is the banks have really tightned up the lending standards. Many people no longer qualify for the loans they were able to take out in the past. My local bank no longer makes loans for spec homes etc.
You’re exactly right — the rebound from this correction of the housing market is going to be very slow, because of tightened lending standards.
I keep telling people who are pooh-pooh’ing the housing downturn to pay no attention to the housing side of the issue, per se (ie, ignore all statements by realtors), and to look at only the debt side of the issue — how much money was lent out on ridiculously stupid mortgages, where that money came from, how it was bundled and sold off to bond investors, etc.
When one looks at the debt market and how the US housing market downturn is roiling the debt markets, it is VERY clear that the amount of liquidity sloshing around the world and being funneled into US mortgages, which resulted in very lax lending terms and qualifications — that money is going away and won’t be coming back. The lending standards are going to get tight, and the liquidity in the mortgage-backed securities markets is going to dry up as investors get burned and don’t come back for a generation.
Just follow the money folks. Ignore the realtors, their projections, etc. Just follow the mortgage money, from the bottom (the mortgage borrower) up to where that money comes from, through the chain of lenders from the top down, and all the while, pay attention to how the bonds were rated (Moody’s, S&P, Fitch’s) and how borrower credit ratings were shammed up (Fair Isaac & Co, FICO scores, etc).
Doing so will show you that there was an absurd amount of money from international lenders was flung at the US housing market, those lenders are getting burned (big time) because the credit ratings for the borrowers were completely ignored or fabricated, and the lenders of money to the US mortgage market are getting burned, burned badly, won’t be so eager to lend to US housing debt again.