All I can say is that the death of the American consumer has been wrongly forecast for a long time. I agree that compared to traditional lending practices, we have moved into a fantasy world. But the producers of this fantasy world have 500000 times the resources available to keep the party going as the other camp.
The single thing that is a serious counter to all the forces that would rationally pop the outrageous runup in RE prices is that on the other side of this trade is/are the most powerful monetary forces on earth: Central banks, led by our friends at the Fed. This month, actually yesterday, the Fed ceased the release of M-3 information. The same folks who think the RE bulbble is in serious jeopardy point this out. The lack of this info will mask the level and velocity of of money pumped into the economy, primarily into the stock and bond markets, and primarily for the benfit of Goldman Sachs. Witness their blowout earnings announced a few days ago.
The rational part of my brain says the RE runup is a total charade and vulnerable to decline, perhaps serious decline. But I have to also consider that the growth in the money supply has been staggering under latter-day G-span and how helicopter Ben. So unless one ignores the forces working to prevent the pop, the future of RE is not entirely clear cut, as I see it. RE bears are taking on the single most powerful force on earth.
"RE bears are taking on the single most powerful force on earth."
What you are implying is that the powers that be will write what ever monetary policy is necessary to keep the party going. Whether the policy even makes sense or not is another question. If that is the case, I say one thing.
BUY GOLD!
... oh my god, I hear them coming now. Better go hide or put on the flame retardant suit.