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When one looks at the long term gain in real estate values it can vary from area to area.  But let's say the long term rate of appreciation in housing is 7% for the past 30 years.  If housing grows at a very fast rate of 20% to 30% for two or three years then in the next few years housing will regress back to the mean or the normal appreciation levels.  In otherwords housing values will decrease over time until it catches up to the historical appreciation levels.

The above graphic is taken from an article that I am referencing on the web.  It is a chart that represents Phoenix.  In this chart regression to the mean can vary at different rates.  But if it does so in a few years, say 2008, then a home purchased for 380,000 would drop to 225,000.  That's a 34% drop!  If it regresses to the mean in 2010 it would necessitate a 10% drop in the original value. 

See the link below for a complete discussion.

http://usmarket.seekingalpha.com/article/18667

How does this apply to our local markets?  Well if appreciation on our lakes was 7% before the big surge in values which occurred in the 2000 to 2005 period, then over the next number of years values will drop to regress to that mean.  We are going to return to the "normal levels of appreciation".  Thus the bigger the growth spurt the greater the adjustment to the normal levels of appreciation.  How long that adjustment will take one cannot be sure of.   That it will take place is pretty certain.