A real estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, typically following a land boom.
Real estate is "property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this an item of real property, buildings or housing in general.
An economic bubble or asset bubble is trade in an asset at a price or price range that strongly exceeds the asset's intrinsic value.
Are We in a Real Estate Bubble? by Phil Pustejovsky
A land boom is the rapid increase in the market price of real property such as housing until they reach unsustainable levels and then decline in a bubble.
In English common law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and whose improvements come from human efforts.
In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.
In economics, market price is the economic price for which a good or service is offered in the marketplace.
Housing Bubble Explained by John at Real Estate Decoded
The questions of whether real estate bubbles can be identified and prevented, and whether they have broader macroeconomic significance are answered differently by schools of economic thought, as detailed below.
In the history of economic thought, a school of economic thought is a group of economic thinkers who share or shared a common perspective on the way economies work.
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole.
The financial crisis of 2007–08 was related to the bursting of real estate bubbles which had begun during the 2000s around the world.
The financial crisis of 2007–2008, also known as the global financial crisis and the 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.
Bubbles in housing markets are more critical than stock market bubbles.
A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation.
Historically, equity price busts occur on average every 13 years, lasts for 2.5 years, and result in about 4 percent loss in GDP.
Housing price busts are less frequent, but last nearly twice as long and lead to output losses that are twice as large.
A recent laboratory experimental study also shows that, compared to financial markets, real estate markets involve longer boom and bust periods.