It appears to me that the futures are fairly efficient, reflecting all available information, but not perfectly so - allowing opportunities for arbitrage.I personally would not bet against housing prices rising further.

But in recent years, borrowers used stated income loans to artificially inflate their income to qualify for bigger mortgages.

The Silver line extension is heading over there and prices have not skyrocketed yet, but they are on the rise. 2.

What if interest rates rise precipitously?  

Also, in the later life of the 30 year loan, you'll be paying down the "fixed" payments (that never change) with inflated dollars that are worth less than they are now. $500 dollars 25 years from now could very well equal $200 or less in current dollars.

They paid anywhere from 2%-3.5% plus inflation for the last 15 years.

http://realestateinvestingtoday.com/average-us-apa...The tides of rising rents may be turning 

I have done projects anywhere from a 42 stories luxury high rise, luxury retails, hospitals, school, and to smaller tenant improvements.  

But according to the previous appraisal it should have at least rised a bit, if not to $155K?

While I don't think there's a whole lot of risk in a structured settlement, a 2.79% IRR barely keeps pace with the inflation rate in the US.