I think loans without income to back them up is an indicator of a bubble, but that's not what we have. But new jobs, esp. higher paying jobs are concentrated into narrow areas, like Seattle, SF, Austin. There are only so many houses, they are building more but except for apartments in Seattle there's no evidence of enough housing to meet demand. So I think housing prices should keep going up.

If housing prices were going up in towns without people moving there, that would be a different issue, but that's the opposite of what is happening. Interest rates are going up slowly, that should slow housing price gains.

If salaries were rising enough to justify the increase in house prices, then we’d also see rents going up at the same rate.

That’s not happening. Also, back when houses were $200K cheaper, and interest rates were almost 1% lower, you needed exotic mortgages (like adjustable rate) to make the cash flow associated with buying make sense (assuming you make apples to apples comparisons between owning and buying).

They were until about 2 years ago in SF.

You can chart the price / rental increases based on the marginal high earner. You have 1 'tech' salary rent levels and 2 'tech' salary rent levels.

There are probably a lot of young, childless professionals who can afford it now (with little additional savings) and plan to eventually sell and buy a home elsewhere. They may not be adequately diversified or prepared to stay in their home once they have the added costs of family, child care, aging parents, etc. though.

"They may not be adequately diversified or prepared to stay in their home once they have the added costs of family, child care, aging parents, etc. though."

But that's said like any generation is ready for that. I certainly wasn't. But it really provided enough drive for me to attain a higher status (Not status for status sake, just financial comfort).

There will be those that make it, and those that break it.

As said elsewhere in the thread, some towns that are losing people have their house prices going up.

Speculation is a substantial part of it. Especially as some places are in economies at the end of a very long expansion cycle.