Lending Standards Plumb New Depths

But how, you ask, can real-estate mania be going full-bore in a region where home prices are so very high? Some would answer that it's simply a matter of all-but-insatiable demand meeting temporarily insufficient supply. No argument here. But even the most cravenous sort of demand cannot by itself cause a market to boom as Southern California real estate has. It is not the demand for housing per se that has pushed prices to extremes, however, but rather the relative ease with which home buyers can borrow money.