Jeremy Siegel, Professor of Finance at the Wharton School, University of Pennsylvania and author of the books, Stocks for the Long Run and The Future for Investors,was on CNBC with Maria Bartiromo a couple of days ago, here is a summary of his thoughts on housing prices:

Three trends causing the housing prices to rise:

1) Low interest rates
2) Demographics – Baby boomers looking for second homes
3) Globalization – Causing prices to rise in all the major cities worldwide

Q: Why globalization?

I think rich Indians, Chinese are looking for multiple homes. In London, New York, Paris the major cities of the world. That’s why we see a global boom.

Q: Do you think we’ll see a slowdown? Do you think it’s going to impact the broader economy in this country?

I think globalization and demographics are going to continue. If interest rates were to rise we’d have to have a slow down in the market. I don’t see a crash. Unless rates rise very very rapidly, a little bit of a pause in the economy. The speculation of the land is what’s being driven up in the prices in the US and around the world.

Q: Is it as close to bubble like levels around the world as it is in the US?

I worry when I see the behavior that reminds me of day trading the internet stocks. With increasing wealth around the world you are going to have continued pressure on prices.
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