Just my thoughts,

Of course we are going to see incredible mark-ups. We can not forget that Real Estate  values are based on supply and demand. NYC is a great example of this. If you take a look over the last 20 years it is just incredible. We have experienced the same thing here in CT. Ecspecailly over the last several years. Now we ask, who is responsible to this huge mark up. I think it is a combination of supply and demand, lenders pushing that market, the fed holding interest rates at a damn good deal and the consumer believing in it.  We bought a small home several years ago in the "bad" section of an affluent Hartford suburd. Now at the time I really thought it was a risk, it was over priced by about 10%. In the four years that we have owned the property it has increased in value by over 50%. Now where in the world can you get a return on your investment like that. (unless you have a really risky stock). Now I know that the prices are inflated, but the lenders are taking over a 90% risk on these properties. The house across from us, same thing, just went over 180,000.00 for a 2 bedroom, 1000 sq. ft. colonial (nothing but a little house) I did some research and found that the folks who bought it only put down about than $9000.00.  The way I see it is, if lenders are willing to take the risk they are, then they most have a good idea of where things are going. I keep thinking we are going to see a crash in the market or bubble, but as long as there is demand(which I don't see going anywhere) we will have a great market. Not to mention, the refi wave may be gone for now, but we will have market turn over that is for sure. And if we don't have that we will have foreclosure work!  That is how I see things here in the North East.

Robert