Subprime mortgage defaults peaked and will slowly begin to slide during the next two years.

But don't get excited -- option ARMs and ALT-A mortgages are now beginning to rise at a very rapid rate. According to analysts I follow, notably Ivy Zelman, the next tsunami will be larger than the one we just went through.

And the banks are not currently valuing these mortgages as if they will default at this rate.

Be sure to read all 7 reasons the stock market isn't going up any time soon.

Michael Shulman is a contributor to OptionsZone.com.

When it comes to the real estate market, yes, things may get worse before they get better. And getting better will take time.

Having posted two stories about the housing "bubble" several things have been ringing loud and clear in the comments -- of which there have been plenty. I objected to the term in my original post, Housing Truth from Main Street, because I do not like the reference to the stock market bubble and I felt that the term was too freely used and becoming a cliche. Since then, readers have corrected me by the dozen.

But it seems that it is not just prognosticators of headlines and Wall Street attention-grabbers that have adopted the term but the general public, academics and the broader housing industry. So, if not by fact then certainly by usage and acceptance by the public, I stand corrected. There appears to be a bubble whether I like the term, believe it, or not. Not everywhere, and not to the same degree, but enough to affect the market and get people's passions stirred up and their financial statements out of balance.

Comments my posts received support my notion that there is great variation in the degree of the problem based on geographic location. In a my follow-up story, Housing bubble, debt bubble or same thing? another issue that was reinforced is that there may be a need for housing, but demand is price driven. Personal debt and national debt have reached crisis proportions at many different levels and this is broadly felt by many people and affects how much they can afford.

I summarized this premise while responding to comments in a prior post: "How much trouble we shall soon see. I have stated there is a real need for more housing. This is true, but need and affordability does not always coincide so demand is affected and in turn pricing and current value are affected."