It's not the median or average price that's the issue. The people who bought the top, especially first home buyers, would owe more than their house is worth if prices fell 15-20%. This is the real problem and so ensues a crippling domino effect. Even if the bank takes your house, you still owe the difference in this country - we're not America. Think of the implications on economic activity if even a small portion of mortgage holders lose their houses and are stuck with the overlay.
It's evident people are nervous. I even heard a real estate agent the other day telling people if they don't sell now, they'd need to wait 5-7 years before prices are back at current levels. That's when you know crap is about to hit the fan.
