In areas close to the city (Somerville, Belmont, and Cambridge), every new house listing is a bidding war. All contingencies waived. Because the demand is so high, a lot of people don't sell houses as a whole anymore. But instead opt to sell multi-family houses as condos. And these condos still sell quickly.
The reason for the demand is that house buying is actually a very stable investment. Rent money covers the mortgage. Remodeling cost always repays itself (and in most cases actually give you a net gain). House itself appreciates year over year. Even the last recession did not slow down the appreciation much.
The risks you mentioned actually only apply to people who are new to all this.
