The key to understanding current Real Estate market forces rests on an examination of the dynamics impacting the global Real Estate market in the 2000 to 2007 timeframes that were responsible for  precipitating previously unprecedented double digit price increases almost every year, and to compare this economic environment to the factors in play today.  

Most important to consider is that lending standards, interest rates and mortgage underwriting criteria became most favorable to home buying within a very short timeframe soon after the collapse of the 2001 tech bubble.   Consumer lending was also greatly expanded along with many other monetary expansion measures designed to prevent a recession or even depression level economic event that was sure to follow the correction in the stock market. 

Fractional reserve lending standards were eviscerated by clever new bank instruments like Collateralized Debt Obligations, (CDO's) and Credit Default Swaps (CDS's), and other credit derivatives that permitted banks to repeatedly sell loans to third parties in order to create new debt and turning existing debt into new cash reserves to start the fractional reserve cycle over again, virtually without limitations. 

The ensuing liquidity bubble then finally came to an end when consumer debt expansion had reached a saturation point whereby the origination of new debt could no longer keep pace with repayment of the gross aggregate existing private and public debt that is constantly being repaid, inclusive of principle and interest, causing a contraction in the M1 money supply and consequently a monetary recession.

The book Manias, Panics, and Crashes, by the late Charles Kindleberger, illustrates this concept in detail.

http://www.economist.com/node/1923462

 Once this inflection point had been reached a exponential decline in M1 money supply was sure to follow causing critical liquidity shortages that quickly spread throughout the financial markets and general economy, and that would have no doubt culminated in a wide spread collapse of the global financial system had the US government and other governments and central banks around the world not intervened with a massive financial bailouts that are indirectly the cause of the current stock market and Real Estate bubbles. 

Bailout funds provided to investment banks, various other financial institutions and corporations around the world and other such mechanisms of the quantitative easing spear headed by Ben Bernanke in 2008 then of the US federal Reserve and Hank Paulson secretary of the treasury of the US government at the time, provided the necessary liquidity to subsidize the various failing investments around the world that were the result of the new abuses of the fractional reserve lending system by the banks originating these new and now failing debt instruments, which according to Mark Faber of www.marketwatch.com had a notional value, that is original value of 1.3 Quadrillion in US dollars, that is 1300 Trillion dollars.  Quite a sum.

These new bailout funds were then immediately invested into the stocks, commodities, government bonds where they could turn a profit until needed to subsidize the failing loans on the books of these various institutions.