When we noted the other day (1/17/13) that home prices are rising again at an unhealthy clip, we didn’t realize that there is more to this than we first thought. Today’s New York and Los Angeles Times treat this as a serious story; the L.A. Times headline that says it all (Prices Rise, and So Do Fears of a Bubble, L.A. Times, January 30, 2013, at p. B1). The top five cities show double digit price increases ranging from 22.8% (Phoenix) to to a “mere” 10% (Las Vegas). The 20-city composite is 5.5%. Also see Reuters, Home Proces Surge More Than 5%, the Most Since 2006, N.Y. Times, January 30, 2013, at p. B6.
Do you suppose that another bubble is being blown up? But if you consider how low interest rates are, it may not be so crazy. Stay tuned.