It makes sense that this is not a housing bubble. After all the market over corrected at the last down turn and it is coming back from those lows.

The economy is improving slower than we all would like but it is improving. The federal reserve will most likely not raised rates this year so there should be no tipping point to change the direction of the real estate market.

"Today's higher prices are only to be expected as the economy improves and first-time buyers gradually return to the market," Smoke writes. "Eventually, those higher prices should encourage more owners to list their homes and builders to start construction on new housing – which, in turn, should solve the problem of supply."