$355,000 for that couple's 2 bedroom 1200 sq. ft. house !?? What a rip-

The real estate market in the S.F. Bay Area led to this - consider that property values here have been doing nothing but going up for at least 12 years. A home like this would cost at least 500 K in the Bay Area, probably more. As homeowners started getting priced out of this area (and there's very little new building here, there's no space left), they started buying up in the Central Valley (Stockton's about 65 miles to the east). When demand goes up, and you have willing buyers, the price shoots up - no matter how illogical it seems. And as the program pointed out, if everyone is given a chance to buy, even when they shouldn't have been given a loan in the first place, that kept the demand artificially high, availability artificially low, and that made the price situation even worse.