The "Real Estate Bubble" has been defined and redefined many times. Loosely stated, it refers to the run-up of housing prices in the United States the past few years. Bubbles and crashes can occur in many different markets. A look at our page of historic economoic crashes will show that it has happened in real estate, stock markets, and even tulip markets!

In the wake of the recent dot-com boom, many investors have moved their money from risky stock market holdings to more tangible assets like gold and real estate. In addition, historically low interest rates have made it easier for those who previously could not afford a home to leverage expensive properties. This has led to a growth in real estate prices around the country, with some analysts saying are high enough to be defined a bubble.

Of course, naysayers will tell you that real estate is hardly as volitile as stocks, and after all, people will always need a place to live - so why stop buying now?

What happens if the bubble bursts? It's quite simple, really. A majority of investors will start to see turmoil in the marketplace, and decide to drop out of their investments at once. The availability of new properties will flood the market and lower their perceived value. If this happens, millions of people will lose the equity in their houses, and for those heavily mortgaged or over-leveraged, they will be pushed into paying back a loan for an asset they no longer hold.

You can find out more about the bubble and economic crashes by visiting these links:

Read the definition of "Real Estate Bubble" at wikipedia.

What are Crashes and Bubbles? - from Investopedia.