Two things are powering this insanity. 1 - low interest rates and speciality jumbo programs to lock in high earners are providing balloon capital. When this po

Two things are powering this insanity. 1 - low interest rates and speciality jumbo programs to lock in high earners are providing balloon capital. When this pops people won't lose houses because they have fixed rates, but they will be equity poor or underwater as prices will correct at least 20% with interest rates rising. 2 - cash investors chasing yield and security. The "cash" offers clogging every market are disproportionally inbound from foreign nationals and now even starting to be private placement. Blackstone and other huge PE firms now consider "single family" to be a category akin to multi-family and are placing billions to buy and rent homes for yield. All this blows up when interest rates normalize - eg investors would rather own treasuries / CDs / etc at 5% vs homes at 5%. Sam Zell - an infamous CRE investor nw $5b - has recently said he believes there is a material value of 10-15% a year of holding CASH - eg that the market is just about ready for a major correction and I agree wholeheartedly(1) (1) http://www.horizonkinetics.com/sm_cash_as_liability_zell.asp http://www.horizonkinetics.com/sm_cash_as_liability_zell.asp PS - Some further evidence around interest rates driving home prices from this bloomberg article last year outlining the 0% down and "equity as collateral" from bay area landers -=> https://www.bloomberg.com/news/articles/2016-07-27/zero-down-on-a-2-million-house-is-no-problem-in-silicon-valley https://www.bloomberg.com/news/articles/2016-07-27/zero-down...