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Originally Posted by Yakk
....I find this shared belief disturbing....
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Uh oh. Isn't two economists agreeing on the same thing the 5th sign of the apocalypse?
Shirley he must be joking...
IMHO, the 'Bubble' is probably the byproduct of consumer uncertainty and low interest rates. Pump the money into your house instead of save it. You can see your house. You can touch your house. It feels good.
I think the generation entering the housing market (as in generations past) wants to do better than their parents, and as such the houses consume a larger part of their disposable income. Is this good or bad? I am not sure.
Really, we could argue about the endogenous and exogenous variables in the housing market for ages... but I think I am going to have to agree with Ol' Greenspan on this one: Even if the market is in an inflated state, that inflation is small and not worth adjusting the whole system for, or inducing legislation on that market.