The Washington, D.C.-based Center for Economic and Policy Research is sponsoring an essay contest on "Why there is no housing bubble." The winner will win $1,000. In other words, prove the CEPR, which has been tooting the bubble theory for some time, wrong. Here is what the CEPR experts say: "There is no precedent for the nationwide run-up in home prices over the last eight years–35 percentage points in excess of inflation. Neither the great boom of the '60s nor the demographic surge created by the baby boomers forming their own households in the '70 and '80s led to any substantial increase in home prices, adjusting for overall inflation. "Economists who claim there is no housing bubble–that the run-up is explained by fundamentals–cite several factors: increasing po...
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