Why Blog when readers can write this themselves?
Buried in the comments is this thoughtful essay from "Retired IB'r. I don't share his dark pessimism, but it's certainly a more accurate view of what's happening than you'll find in the latest NAR press release.

To look to recent times (last twenty or thirty years) as any indication as to how real estate will perform in the future is totally folly.

The author of the article you sited for example talks about how the Vancouver market did in the early '90's and extrapolates about today's recoveries.

The run-up’s in values in the last five to ten years dwarves any other period in our lifetime of experience by many orders of magnitude. Just look at the numbers.

This correction is not like anything anyone alive today has ever experienced. And all you have to do is look to the extraordinary moves by the Treasury and the Federal Reserve of last week to put the current situation in perspective.

Do not forget, our "leaders" told us six months or so ago that this was contained to subprime and it was a $50 billion problem. Now it is a trillion dollar problem and climbing six months later. I will not debate whether our "leaders" were stupid or duplicitous, but one or the other fits IMHO. Still, the rapid expansion of the problem demonstrates the mindboggling mess we find ourselves in. Add to this, the fact that Europe and the rest of the world has yet to see the problems in their banking systems as we are currently experiencing (and they will) tells me that this is a worldwide problem that has not nearly run its course.

The tremendous, unrelenting expansion of credit encouraged by the Greenspan Fed linked with a complete and utter failure of regulators and the total breakdown of underwriting standards by financial institutions is what created the worldwide credit bubble that we are witnessing exploding real-time today. To think this mess, which has real estate at its epicenter, will adjust in a mild manner and rebound quickly begs credulity.

Finally, the extraordinary events of the Treasury’s evolving bailout program appear (the details are still hidden in the mist) to not be designed to stop the fall of real estate prices, but instead an attempt to fix the broken intermediation of credit, which has come to a halt, through non-transparency of asset values. To not understand this, is to not understand the current financial meltdown. Whether Paulson, Bernanke et al succeed is still a big open question.

One day, we will find our way out of this wilderness, but it will take time, and the massive destruction of wealth (through the writing down of bad debts). The real estate markets will also have to correct to sustainable levels (without “easy credit” to support them), and only then will real estate appreciate again.

Retired IB’er