I think this story shows why it's so important to remember how credit-rating agencies and investment banks added so much fuel to the fire of the last crisis. Otherwise you will think the whole problem was silly people taking out mortgages they couldn't afford and say "this is just like 2007".

Anyway, I could buy the idea that once again some portion of homebuyers can't really afford what they're buying, but there won't be the crazy systemic effects that happened last time, unless once again bad mortgages are being sold as good ones, buried in financial derivatives.

Personally I think the situation is worse than a bubble- I think this is just how things are now, if you want to live in a city. The demand really is there to sustain these crazy valuations, and young people and those of us who don't own are just screwed.