Cabal, good observation. I agree that confidence is the key and interest rate and employment is secondary, but that only applies to affordable regions. For coastal areas with bubble price, no matter how confident the borrowers are, it will be increasingly harder to borrow money if the leverage ratio is high. By the way, I am not under-estimating the amount of the sideline money. But my theory is that those mainly are savings that will run out some day. With high unemployment and a relatively less frenzy stock market, saving will eventually deplete.
