...well, or the continuation of the credit bubble. You too can own a modest two bedroom in the bay area for a modest half a million. Margin requirements (down payments) are dropping like stones and the fools rush in....
Thing is, at some point, the cost of those high mortgages (combined with fixed or falling incomes) will translate into less and less consuming power: if you're spending most of your paycheck on a mortgage, you'll have that much less to spend on other commodities. At that point, prices will stop rising and the real-estate market will no longer look like a winning investment. At that point, prices will start to fall....or crash.
Optimistically,
Joanna