Overvalued Real Estate

In this article by Lee Christie, he talks about the real estate market being overvalued. The housed are found to be overvalued, but nothing is done to the price. There is word of a slowing market with no price changes. The local Market Monitor president Ingo Winzer has figured out the overvalued percentage by comparing the equilibrium value to the actual price. By no suprise, coastal housing in California and Florida have been found to have the highest overvalued real estate. Recently, the prices have increased even though they have been found to be overvalued. Winzer seems to think that the more overvalued a market is, the more likely it will regress to equilibrium. But how long do we have to wait for it to correct itself? When do we say its been long enough and step in to correct it?