This sticks in my mind from a book I read about 3 years ago.
"Real estate prices in California began rising 25% per year and more. Property owners and early stage developers made fortunes that were well publicised. Not surprisingly, get-rick-quick advice soon followed, pointing out how easily ordinary folk could get in on the action. Middle income families, with no knowledge of the economics of real estate investments or the dangers of leverage, began taking second mortgages on their homes, using the proceeds as minimum down payments on any property, at any price. It didn't matter if they overpaid. The way prices were rising, they would make big profits anyway. No one was thinking cycles. The trend of sharply rising prices was being extended in a straight line that seemingly would never end. Warnings of an unsustainable 'bubble' forming in prices, and signs that some professionals were taking their profits and standing aside, were ridiculed by participants. With obvious demand, how could prices possibly stop rising -ever?
Alas the trend turned on them with a vengeance. Skyrocketing taxes and insurance had become a problem for everyone. Horror of horrors, even longtime Californians began putting their homes on the market so they could move out to lower cost residences.
The California real estate market was soon a catastrophe. For sale signs lingered on properties, with few buyers in sight.Sellers began to drop prices quickly, seeing themselves in race to get out fast before prices fell further.. Banks threw foreclosed properties on the market at fire-sale prices, plunging real estate prices further.
Individuals discovered that the magic of leverage now compounded their losses. Most simply walked away from their mortgages, leaving the banks holding tha bag. Within a year prices had plunged 35%. 10 years later, they were just beginning to recover.
Only those that heeded the warnings, curbed their greed, and took profits as the top approached kept their big gains and were ready for the early stages of the next cycle".
Sorry its a bit long.
I just feel that the risks are now for a fall in prices. Interest rates are historically low, prices in the South tend to lead and have already started falling.