Asymmetrical Information

The Economist lays out, in

The Economist lays out, in simple lucid terms, why the housing bubble eventually has to stop inflating:

The truth is that house prices, like equities, cannot for long outpace the growth of nominal incomes. In the long run, the ratio of house prices to earnings is thus the best guide to their sustainable value. And in Britain, America and some other rich countries, that ratio is now at or near record levels. That does not mean that house prices are sure to collapse; but it makes it highly unlikely that they will go on rising as fast as they have been.