I have been nothing but awed by the frenzy with which people are willing to stretch to buy. People are taking any kind of loan, 3.5% FHA down with 50% DTI, no problem they’re doing it with confidence. People are also readily settling for much less – $500,000 for a 1200 sqft home in a less than ideal neighborhood…no problem, they’re desperate to get in before prices go even higher.
Even though the market has slowed down, inventory is still incredibly slim, there are still way more buyers than homes available.
I thought it was a bubble but I now stand corrected. I think interest rates will remain close to 0 well into 2016 and people will switch to ARMs and interest only loans to afford even more expensive homes. They may compromise even more on their standards.
My guess is that prices may climb more 10-20% over the next few years. After that I don’t really know.
