With a shortage of units available, it can be that the NOI will actually increase which again moves the CapRate upwards.Now if by downturn, you mean total economy recession or depression where jobs are scarce and wages are falling, then that's another matter.

Those selling will mostly go back to renting as they will have no savings (no equity) to buy a less expensive home and there will be a shortage of smaller homes available to buy.

Your sister will still owe the shortage.

Could you imagine what would happen if a REAL crisis occurred (nuke going off, serious pandemic, food shortages, hyper-inflation, etc)?

That way we can all link arms and sing kumbaya as we toil away in the fields of our calorie based economy (that means that food will be in major shortage) in the next 20 years.

Sad to say but we have a shortage of hard working Americans in the US.I think if they are paid fairly and taxed as we are then they should be allowed to come over to work "LEGALLY".

There will likely be a housing shortage in certain areas of Texas at some point in the near future.

The drought has created a major water shortage for farmers (bit part of the counties economy) and there is a moratorium on fracking which is affecting the local oil industry.  

Deals being hard to find does not constitute a recession.We are, however, in a housing shortage due to the crash in 2007 / 2008.

In Dallas there is still shortage of single family housing stock.