No Bubble?

Ben S. Bernanke indicated last week in testimony to Congress's Joint Economic Committe that the price increases over the last few years have a solid foundation, but may not continue at the same pace, which wouldn't necessarily be a bad thing for the economy. Go tell Chicken Little.

"House prices have risen by nearly 25 percent over the past two years. Although
speculative activity has increased in some areas, at a national level these price increases
largely reflect strong economic fundamentals, including robust growth in jobs and
incomes, low mortgage rates, steady rates of household formation, and factors that limit
the expansion of housing supply in some areas. House prices are unlikely to continue
rising at current rates. However, as reflected in many private-sector forecasts such as the
Blue Chip forecast mentioned earlier, a moderate cooling in the housing market, should
one occur, would not be inconsistent with the economy continuing to grow at or near its
potential next year."