Although there are still many experts that think there is no such thing as a housing bubble, or real estate bubble, most would completely disagree.
A housing bubble is an economic bubble of sorts that happens in the real estate market.
Quite simply, it is when the real estate market rises so much that the values of properties reach levels that are unattainable for most people.
Slowly you will start seeing sales of homes decreasing, and houses that were previously selling quickly and at higher prices, sitting on the market for months at a time.
With housing prices often related to economic situations and income there are going to be times when the market seems to be booming and unable to be stopped.
However, the housing bubble will eventually have to happen because it is almost impossible to keep up with the rapidly rising prices of houses in relation to our incomes and cost of living.
This huge rise in the prices of homes is inevitably followed by a severe decrease in prices on the same homes all around the world.
Housing bubbles are not that common on a global level, but locally you can see housing bubbles come up now and again.
With the housing bubble that we seem to be reaching now, there isn't just one city, state, or even country involved.
This seems to be a world wide housing bubble which is very uncommon.
Unfortunately housing bubbles do not just affect the actual prices of the homes involved, there is still a great opportunity for real estate investing.
Because people were so intent on buying quickly and because the interest rates were so low, they often bought larger and more expensive homes that they could actually afford.
When a housing bubble happens, the home loses equity, and interest rates go up which often leads to foreclosures of the home.
It is a domino effect that can greatly affect everyone around the world.