Credit is loosening up again but only because it's possible to game the system. When you see house prices somewhere increase, ask yourself if wages in that area have gone up proportionally. In every case I've examined, the answer is no. So there's no underlying support for the price increase.
While we're not yet back to the days on NINJA loans, I've seen the promotions for "no down" or almost nothing down mortgages. This is always a red flag.
Another red flag is the flurry of media buys advertising refinancing and second mortgages. So the economy will get a little boost, but for the wrong reasons -- people relying on debt (i.e., using home equity as an ATM) rather than increased wages.
The median income in my neighborhood is about $65K/year -- a little higher than the average $50K/year nationwide. But a developer is buying up distressed single family homes for around $200K, demolishing them, then building new out-of-character houses (i.e., cheap and quick to erect) in their place and asking over $900K. When you see housing prices way over the amount justified by the area's income, we're in deep trouble.
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