Doug Noland hitting the nail on the head...

October 7, 2003 – Santa Cruz Sentinel (Heather Boerner): Quoting Tom Brezsny of Monterey Bay Properties: “What’s clear to me is that we’ve established the bottom end of the market is at around $500,000 to $550,000 and we’ve established that first-time home buyers constitute the major demand,” he said. “But the question becomes, how can a first-time home buyer afford $500,000 to $550,000? Certainly some of it is interest rates, but the other part is that people no longer have to have 20 percent down. They can do a lot more creative financing.”



First-time homebuyers “constituting the major demand” for homes in the $500,000 to $550,000 price range? This is the most alarming evidence yet of a housing Bubble.