She will have to discount her house heavily to sell it, but the other people will be discounting heavily too. As long as you buy/sell into the same market, whether it was on the way up or on the way down, you should be ok.

What is more of a concern is whether her husband will still have a job in 2 years. Is his company real estate dependent, or MEW-dependent? I don’t know the answer to that. If he is laid off and forced to sell, then they will wish they had sold at the top of the market and not the bottom.

But as Bugs said, we can’t have everyone escaping the market. We can’t have all 1.1 million homeowners in SD bailout out to escape the housing bubble. So only a few win.

Of course, none of this matters if we start another war in the Middle East. We could all be dead by September.