The key is downpayment. The lack of a downpayment and stated income loans is what drove prices up. This enabled unemployed delinquents and speculators to just make bids and purchase property with reckless abandon. Now that downpayments and documentation of income are required, demand has of course gone to zero and prices will reset to 2001 levels (i.e. correction of the 2003 Real estate peak cycle). The appreciation from 2003-2005 is pure vapor and shouldn’t even exist absent loose lending.
