All these mean the housing market is not only hot, but red hot. I firmly believe we are in the bubble, but it is very hard to call the top. In my hometown Shanghai, people would wait in the queue for two straight days just to buy an apartment. That's two months ago -- today, no one is willing to buy without having a 10% discount. The wind in this industry can change rather quickly.

Instead, there are anecdotes that would have seemed unbelievable 10 years ago. For example:

• Bidding wars in California are forcing real estate agents to write recommendations on behalf of their clients who are attempting to buy a new home.

• Real estate trade groups in Massachusetts are calling on state officials to approve more housing construction to improve prospects for buyers.

• Retirees moving to Florida are living in hotels for weeks and even months at a time as they scour the state in search of affordable places to live.

Most baffling to economists, and even those who reject the notion of a bubble, is that the supply of homes for sale continues to dwindle in places like Florida, southern California, and Massachusetts. Thus, there is no clear sign that the real estate market has peaked. All of these places experienced double-digit increases in home prices throughout 2004, some repeating their cloud-piercing performance for the third consecutive year.