Pinning down when the housing bubble became serious

WASHINGTON (MarketWatch) — Few people saw the housing bubble as clearly and in as much detail as economist Richard DeKaser, who created a city-by-city housing valuation index that showed precisely how overvalued the nation’s housing stock was in 2005 and 2006.
...
In early 2005, DeKaser found that 53 metro areas, accounting for 31% of the U.S. housing stock, were severely overvalued by 30% or more and faced a high risk of price correction. The year before, cities that were overvalued had accounted for just 1% of the total value of the nation’s housing stock. By mid-2006, DeKaser’s research showed severe overvaluation in 79 cities, or 40% of the housing stock.

Interesting. While the roots of the housing bubble probably go back decades, Mr. DeKaser may have found the point at which a smoldering problem was fanned into a blaze by excessively loose monetary policy. This would, I think, be about the time the Federal Reserve, either intentionally or not, was using cheap money to hide the credit market effect of an expensive debt-financed "Global War on Terror".