Despite efforts undertaken, liquidity gaps may eventually arise when an institution is put into resolution. In particular in a slow-burning crisis situation, there is a risk that in the run-up to resolution, more and more assets are being encumbered or disposed, as part of the recovery strategy.
These factors certainly do not mean that bubbles cannot develop in house markets and that home prices cannot decline: Indeed, home prices fell significantly in several parts of the country in the early 1990s.