'Some people … will likely get hurt'

Kiplinger's Personal Finance did a Q&A with Sam Lieber, founder of Alpine U.S. Real Estate Equity fund. He had some interesting observations:

KIPLINGER'S: Are we in the middle of a housing bubble?

LIEBER: Yes and no. There is no bubble on a national basis, but some markets are certainly overheated and there are speculative elements in those markets. Certain markets in Florida, markets in the Washington, D.C.-New York City corridor, Southern California, Arizona and Las Vegas have been very strong.
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KIPLINGER'S: Don't you worry when you hear stories about twentysomethings owning half a dozen homes and flipping them in less than a year?

LIEBER: That's crazy. Roughly 25% of homes are being bought either as second homes or as investments. That's way up but not surprising, given the strength of certain markets. There are probably some people investing aggressively and foolishly who will likely get hurt by a pullback in prices.
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KIPLINGER'S: How vulnerable are housing prices to rising interest rates?

LIEBER: If mortgage rates rise one percentage point over the next year, that's not significant. If rates rise two to 2.5 percentage points in a six-month period, we've got problems. But if they rise two to 2.5 points over three years, it will presumably be because the economy is strong, and that means incomes will grow and people will be able to make higher payments.

More at Kiplinger's.