The Fed is providing $45 billion dollars per month in 'hot air' liquidity for the housing market. Billions of these dollars are being loaned out to newly formed capital / investment entities whose goal is to buy up as many foreclosures as possible, along with any other desirable properties that may be available.
A number of industry professionals are telling me that prices are beginning to rise significantly and the inventory of available foreclosures is dwindling. This is creating a demand for housing that is resulting in a tighter supply and driving selling prices upward like a balloon. But when the hot air runs out, the balloon falls back to the ground.
Investors nab foreclosures, creating a new price bubble
Source: Realty Biz News