Are we in a housing bubble?

Ed Leamer says yes, Brad DeLong takes issue. Here is a wide array of writings on the topic.

Housing has never, to me, seemed like an especially bubbly asset. You use it every day, most of the market is not driven by speculation, and the transactions costs of asset churning are high. Furthermore the rental alternative would appear to keep prices somewhat in line with fundamentals.

A deeper question is what makes for a bubble, ex ante. The "cheap" definition of a bubble is to wait for the price to fall, and then declare that the earlier, higher price was a bubble. We can throw out this cheap definition, but then we are stuck in the vagaries of modal logic. "Hey, I just knew that price had to fall..." Not very convincing. I am convinced that bubbles are real, I am simply unable to define them.

One reader asked for investment advice about the real estate market; this is hardly my forte. Nonetheless I will offer the following: If you are investing in multiple real estate purchases, as opposed to just buying a home, ask yourself the following question? If a "dirty bomb" went off in my area, would I still be a wealthy man?