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A recipe for housing bubbles

Analyst says development restraints inflated prices

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AUSTIN, Texas -- Before the subprime time bomb, there was a "witch's brew" at work that hyperinflated home prices in many markets, and that same concoction could kick in during the next real estate boom, according to one housing stats expert. Mike Inselmann, co-founder and president of Metrostudy, a data company that provides housing and other statistics, said the "unindicted co-conspirators in this whole bubble phenomenon ... the genesis of the housing bubble was the witch's brew of a strong local economy in metro areas that had very restrictive growth limitations." The building industry in some cases was "running up against the inability to develop new subdivisions fast enough to meet that demand," said Inselmann, who spoke during a session Thursday at the National Association of Real Estate Editors annual conference in Austin. While Inselmann said he is not opposed to all restrictions that limit new development, he advocated for better dialog...