[quadzilla]

My question is for the people in the buy now camp is what do you see that could drive the prices higher in the next few years?

I was a mortgage broker during the boom and this is my take on the situation. When the market was hot I could put a loan through for anyone. The subprime portion is obvious but, the big issue to me where the loans I was putting through for conforming borrowers at that time. The majority of borrowers that I saw in my area (Chicago) put little or no money down and took an interest only ARM. In most cases they couldn't even afford a fully ammoratized loan. I did very few loans where someone had 20% down and they took a fixed loan and had no problem making the payment. Then there were the No Doc, Lo Doc, Neg Amm and other programs that just seemed crazy even at the time. These programs created an artificial demand that drove the prices so high. A 5 year arm is about the same as a 30 year fixed loan right now and I don't think the majority of these other programs exist any longer.

I am no longer in the mortgage biz but, maybe someone who is can say how easy/hard it is for the average consumer to get a 100% LTV loan or a no doc/ lo doc loan etc. If banks want people to put money down I don't see how the demand can catch up any time in the near future.

I think the prices still have a long way to drop but, even if they don't can anyone give a compelling reason why they would be any higher than they are now in the next few years?