The bullish argument is clear:
- Low inventory
- More money sloshing around
- Higher population
- Higher rents
The scarcity may be artificial, but the results are clear.
Once prices are higher, you get other feedback mechanisms.
- Foreclosures, delinquencies, underwater people are all lower
- Banks toxic loans are less toxic than they were.
- more people can move up
In the longer term, it may not be enough, but until the next crisis, that's what you get.