It appears most people are calling on a quick end to the sharp incline in house prices over the past year (or more). Anecdotal evidence points to the same conclusion. House values in the Bay area for example, or on the decline. Then again, that area has been known for it’s irrational exuberance in the past.
Nevertheless, I have a host of links to stories and articles that lean towards pessimism. One of my favorite bloggers is Calculated Risk, here is his analysis. There is also one more article here [NYTimes].
UPDATE: If your watching Calculated Risk, his latest post is about arguments against inflated prices.