When demand drops for housing, that's often because people have moved in with relatives, moved in with partners, etc. After whatever triggered that, many might decide they like paying less rent/mortgage costs, so demand will never fully recover.
This inertia will probably apply also to those who die :)
Demand is not the same everywhere. I expect the in demand areas of the US to continue to stay in demand. Prices in the areas without demand will go down further.
I generally have believed that as well, but wonder if there will be some flight away from cities after all the dust has settled, at least in the shortish term.