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It seemed obvious to me (from a layman's point of view) that houses were way over priced as early as 2003 when we sold our house in Seattle. The local paper even ran an article about how 50 to 70% of the people in our area would not qualify to buy their own house at the current prices.
Isn't it obvious that most people cannot afford much more than 3 times their annual earnings without a crazy adjustable rate (time bomb) mortgage. Surely the professionals that dabble in these things knew prices had to come down. Just because someone making $75,000 a year can get a mortgage for $400,000 does not mean they can afford it. Especially if they are denied refinancing before the monthly payment resets and goes up.
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