Greenspan: No Real Estate Bubble. Or is there?

CNN is reporting on a Greenspan speech in which our favorite objectivist assures us that there is no real estate bubble.  CNN's headline:  "No Real Estate Bubble"

However, once you read the article, suddenly things don't seem so rosy

Federal Reserve Chairman Alan Greenspan said Friday the booming U.S. housing sector shows signs of some "froth" but that the central bank does not see a national housing bubble.

"We don't perceive that there is a national bubble but it's hard not to see ... that there are a lot of local bubbles," Greenspan told the Economic Club of New York.

Since I live in one of those local real estate markets he's referring to, somehow I am not reassured.

More below the fold...

Greenspan states that rising real estate market is "not a serious macroeconomic problem."  But then he says

Eventually, home prices will decline because the underlying pattern is unsustainable, Greenspan said.

"Without calling the overall national issue a bubble, it's pretty clear that it's an unsustainable underlying pattern. What we see are a number of forces, which are, as far as I can judge, not infinitely projectable," he said.

But when home prices slow, only those who purchased homes just as the prices begin to drop will be impacted by the decline, Greenspan said.

"Without calling the overall national issue a bubble?"  Well, what would he call an unsustainable situation that will inevitably lead to a drop in prices?  I know I wouldn't want to be one of those unfortunate souls who buy in at the peak of the market.

Greenspan will be remembered for the asset bubbles that his economic policies helped create.