This quote sums up the housing market right now. Housing is definitly overvalued. It WILL come crashing down as most of the mortages in a large part of the country are those interest only scam loans.
Vox Popoli: Only four years late: “As Mr. McCulley predicted, interest rate cuts led to soaring home prices, which led in turn not just to a construction boom but to high consumer spending, because homeowners used mortgage refinancing to go deeper into debt. All of this created jobs to make up for those lost when the stock bubble burst.
Now the question is what can replace the housing bubble.
Nobody thought the economy could rely forever on home buying and refinancing. But the hope was that by the time the housing boom petered out, it would no longer be needed.”