It would have dived eventually. Too many people were engaging in stupid and/or shortsighted practices for things to have been sustained. People were getting into agreements they didn't understand (when you hear talk about "unwinding" agreements, they mean actually finding out who owes what to whom), lying to their risk assessment people/software, and getting way over leveraged. Another thing that didn't help was the removal of the uptick rule on short sales. There was a lot of things converging on this debacle. The real estate pop was just the domino that fell first, and as it was closely tied to the credit markets and banks, they felt it first. We may have ended in a somewhat different mess, but it still would have been a mess. There is "bad business foresight" and there is outright stupidity/malfeasance. Just like a depression is from the psychology of scarcity, a bubble is from the psychology of a mob. I could probably make a post as long as that last one just talking about the things that contributed.

The hurricanes didn't help, but that certainly didn't pop the bubble. Yes, Florida is one of the states which suffered the greatest housing decline, but California and Michigan were right up at the top as well. The first big glaring sign was the summer of 2007. That's when the MBS market locked up. I think hardly anyone expected this to propagate like it has. Instead, almost everyone was standing around going "wtf?".