How can the Housing "Market" go down, when there is too much demand, chasing too much supply? (Economics 101)

[Ken A.]

How can the Housing "Market" go down, when there is too much demand, chasing too much supply? (Economics 101).  Both wholesale and retail.

Here are some big reasons it will make it's way higher till 2022-2024 (typical cycle):

1.  Lowest interest rates almost ever.

2. Too much demand chasing too little supply.

3. GREED of "Wall Street" - have to put idle cash somewhere.

4. More Government intervention?  Don't know what this will look like this time.  Lower Fico's? Very small down payment? Alien attacks?

5. Rents continue to rise, favoring Landlords to buy more and also 1st time homebuyers to buy instead of rent.  This is not full (fool) proof, but will add some pressure to higher prices.

6. Household formation continues to rise (i.e. higher population in U.S. every year), and new single family housing starts are no where near the highs.