[whitetop]

I think there is a lot of stresses on the real estate market today that we did not have in the past that is going to create a bubble in many areas.

Average equity levels have been decreasing every year. There is a rising trend of people who are upgrading to newer/larger homes coming in with lower equity levels than in the past in their old homes because they spent their equity on CARS, boats, vacations, CC debt etc.

There are more ARMS (40% of all loans today are ARMS)
When the rates go up 4-5 years from now people will have a hard time affording the extra payment. This is one reason they took the ARM over the fixed rate in the first place..they wanted their McMansion right away. (I'm not refering to flippers). Look at all the new loans out today that are ARMS with interest only payment.

Some say the appraisals done over the last 4-5 years will turn into a huge scandel itself that will make the S&L banking fiasco look like childs play. Many appraisals were done that over infalted the homes worth so the people could get the loan and the lenders looked the other way. However when people try to sell they are going to find out their home is worth less than what they paid for it. Add on those 1110, 115 or 125% ditech loans above that and they really will be hurting.

Also, like one poster said above houses in one area went up 40% in one year. That means that proprty tax will be going up also. I don't know too many people that can take a hit like that year after year in property tax hikes without eventually bailing out and moving to a lower priced area.

Some may say I'm pessimistic but if you told people back in 1999 that tech stocks would loose 90% of their value in a few short months time they would have looked at you like you were nuts.