Suddenly, Salt Lake City is a seller's market where home prices have zoomed 10 percent higher than a year ago and multiple offers come in the day homes are listed as bidders line up to toss in as much as $10,000 more than the asking price.

Zero Down Mortgage, a division of national wholesaler No Red Tape Mortgage offers only 100 percent purchase mortgages to nab down payment-poor borrowers trying to cope with skyrocketing home prices.

Midland Pacific Homes is sending speculators packing in favor of owner-occupant buyers vying for $300,000 newly built homes, which not long ago sold for $200,000 in developments in California's Central Coast where the median price of homes recently surpassed a half million dollars.

Homes are selling like hot cakes in America and perhaps the only thing moving faster are the market pundits slathering on predictions about what's to come based on everything from an asset grab by China to higher property taxes in LA.

Beginning to take on the atmosphere of a carnival midway, the housing market boasted an all-time record high for new home sales in April, with the median price jumping more than 6 percent to $230,800. Sales of existing homes likewise rang the record bell with the median price reaching $206,000, up more than 15 percent from a year ago.

And the Commerce Department said housing starts, desperately trying to keep pace with demand, soared 11 percent in April to an annualized rate of 2.04 million units.

In a market flush with a growing number of speculators and the easy money of zero-down loans, interest only payments and record low mortgage rates, there is also no shortage of commentary about what looks more and more like a high wire act.

With nearly two dozen experts jostling to opine from ProfNet Wire's corral of housing news sources, the consensus is that housing inflation has its limits and the end is near, but the local nature of housing markets offers an ample safety net.

"The predicted demise of the real estate market is greatly exaggerated. Unlike the stock market, which by its very nature can witness massive price swings in a matter minutes, shifts in the real estate market are more gradual and generally don't involve 'bursting bubbles'," offered Christopher Brown, co-president of Prudential New Jersey Properties.

"... Markets differ from state to state and town to town and, in some cases, neighborhood to neighborhood. In the end the market will set the price; it's the ultimate lesson in supply and demand," he added.

Newspaper woman Valerie Patterson, senior producer of Dow Jones RealEstateJournal.com agrees.

"While there have been some housing 'busts' after booms, they have been relatively rare, and always driven by some local economic condition, such as severe job losses and a resulting exodus of residents. It's true that the 20 percent to 25 percent year-to-year gains that housing values in some U.S. cities have been experiencing can't be sustained, but I don't think a bust is likely to follow," Patterson offered.

James Berman, president of New York investment firm JBGLOBAL, LLC sees an insidious offshoring-type threat to housing.

Apparently, it's all China's fault.

"Is it possible that a faraway currency gambit is responsible for our housing bubble? Yes, if you consider that China must buy massive amounts of dollar-denominated assets, including Treasury bonds, in order to maintain its much-maligned peg of the yuan to the dollar. Thus, China is forced to buy our bonds to peg its currency. This yield distortion fuels the easy money that has fed the binge on real estate. With mortgage brokers pushing ARMs at 3.85 percent, any six-figure Babbitt can afford a McMansion on Main Street -- that is until rates climb," he warned.

Closer to home and more economic sanity, perhaps, Chuck Dannis, a former real estate appraiser and consultant and now lecturer at Southern Methodist University, says California and Florida will be the first to go.

"Housing bubbles pop for two reasons: prices get so far out of line with household incomes that the next set of buyers can't afford them, and/or the real estate is simply a commodity whereby speculators seek to buy low and sell high ... California is at risk of popping because of the former, and condominiums in Florida because of the latter," he said.

Norm Miller, the director of the Real Estate Center at the University of Cincinnati, suggests the California market is harder to peg than one might suspect. Despite the fast rising prices, there's the Golden State's perpetually short supply of housing.

"Californians are more optimistic about housing and more willing to take on greater financial risks, but less able to find new supplies of affordable housing. This makes several markets in California more susceptible to a housing price dip than other markets. More likely, they (prices) will move sideways in California, with less appreciation the next five years compared to the rest of the country," Miller opined.

Short of a mudslide-driven earthquake in a firestorm, California's housing market can survive just about anything, says Anthony Marguleas, owner/broker of A.M. Realty.

Well, anything but higher taxes.

"Even if interest rates rise, the market will flatten slightly, but that's the air coming out of the balloon, not a bubble bursting. Changes in capital gains and property tax in L.A. are the only things that will force a change," Marguleas promises.

But "to pop or not to pop?" may not be the question when it comes to a roof over one's head, suggests Jeff Lyons, general manager of RealEstate.com.

Most people purchase a home to put down stakes and have a place they can call their own.

"While recent trends in home appreciation probably aren't sustainable, especially in certain markets, continued low mortgage rates and improving job prospects give consumers the ability and confidence to buy homes. Consumers looking to buy a home to live in for some time can be less concerned about any slowdown in housing that results from rising rates than those with a shorter time horizon," he said.

Published: June 2, 2005

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.