When to get out of the way depends on how fast prices move. In stocks, I got out of the way in March, thinking a recession later this year would lower stocks. I don’t care that I was early.
In housing, I didn’t understand the bubble aspect until recently. In hindsight, anyone that got out at as soon as price softening was evident, like summer of 06, is going to be okay. Housing prices move so slowly, it’s almost impossible to lose money if you are really watching the market. The bears just didn’t know what to look for. They saw prices were unrealistic, but failed to understand that they should buy anyway, because there is plenty of time to get out of the way. People with proper knowledge would have bought until spring 04, when the low end softenend, and sold between summer 04 and summer 05.
