Great comments by both Rich and sdduuude (though I disagree about the last few words in sdduuude’s comment).
One of the essential parts in building a bubble is speculators driving price increases, based on the expectation that the market can only go one direction. I don’t think we’ve had that. We have had investors buying up large quantities of properties in some markets, and while by most appearances there is no difference between speculators and investors, intent is a huge difference. Investors buy for yield. And I think that’s what we’ve seen. Even flippers aren’t always speculators. When they buy, remodel and sell, that added value makes their intent very different from buyers that buy and turn around and try to sell for based solely on rising prices.
It’s way too early to call this a bubble. Rich’s pending graphs will shed some light. It may become one, but there are too many other unusual market conditions (limited new construction, extraordinarily low interest rates, very low yield on alternative investments among them, and possibly the most significant, low inventories) to label this very short term rise in prices a bubble. Twelve to eighteen months out, maybe sooner, we’ll know more.
