BOB GARFIELD: If the word "bubble" sends a shiver down your spine then you probably own real estate in New York or elsewhere in the Northeast corridor, and you have read at least one of the many recent stories warning about the bubble and its looming burst. Every venerable publishing outlet in New York has weighed in. Daniel Gross wrote at least one of those stories, and he joins me now to explain bubble mania. Dan, welcome back to the show.

DANIEL GROSS: Thanks, Bob.

BOB GARFIELD: Just for starters, what's a real estate bubble and why are we maybe in the middle of one?

DANIEL GROSS: A real estate bubble is a unsustainable and seemingly inexplicable increase in the price of real estate, accompanied by the sort of speculative behavior that we saw with stocks in the '90s. In the '90s bubble, people went around and bought stocks on margin; they didn't know what they were buying. They tried to flip them. There was an assumption that things would just go up and up and up, and when the bubble burst, a lot of people got burnt. And I think in certain markets, one of them being New York, we're seeing a lot of that same type of investor-fueled behavior.

BOB GARFIELD: But here's the thing about bubbles - we sort of know they're eventually going to burst, but nobody can ever predict exactly when. That was absolutely the case with the dot-com bubble. It kept inflating and inflating and inflating for the longest time.

DANIEL GROSS: Yeah, and the difference this time around, I think, is that you know, in the late '90s and even through 2000, the large sort of media complex collectively missed calling the bubble. If you watched CNBC or read the Wall Street Journal or Money Magazine or the personal finance magazines, there were really comparatively few serious warnings - you know, get out, the end is nigh. And we all rode over the cliff together. I think in compensation for that, you see many more people who make their living in the media as analysts, journalists, wanting to get out on the record saying I may have missed the stock bubble, but I'm not going to miss this one. You're warned.

BOB GARFIELD: Now the stories that have been just everywhere the last few weeks have been showing up in the news pages, in the magazines and the business sections, but not necessarily in the place where home buyers go when they're thinking about buying property - the real estate section. At the risk of tossing you a softball, Dan, gee, why aren't these stories on the real estate pages?

DANIEL GROSS: Whether it's subconscious or conscious on the part of the editors who run those sections, it doesn't behoove you to speak ill of the product that your section is there to sell. If the auto section of the New York Times were to run articles week in, week out saying driving is unsafe and it's a bad time to buy a car, it wouldn't be around for too many more months, and I think that's one of the issues that the editors of these sections are facing. They know that prices are rising; they know that elsewhere in their newspapers and in the magazine world that people are talking about a bubble, but there are all kinds of incentives, obvious and hidden, for them not to be plastering those headlines on their sections.

BOB GARFIELD: There's a principle in investment that it's impossible to time markets, which raises the question of this cover story line from Fortune magazine. It said "U.S. housing prices are stretching the outer limits of what's reasonable and sustainable." That story was in 2002. [LAUGHS] Now, in the June, 2005 Fortune magazine, the cover story is about flipping apartments and getting rich off of it.

DANIEL GROSS: Time Incorporated magazines, especially with their cover stories, have a great record as kind of contra-indicators. [LAUGHTER] A company makes it on to the cover of Fortune as the next great thing, like Krispy Kreme did a couple of years ago, that's the time to sell the stock, and I point to the cover of this week's Time magazine, which is titled America's House Party. It's a long cover piece, and you can only find two paragraphs in there where they quote one economist who warns about a bubble, which to me means one thing: Look out below! [LAUGHTER]

BOB GARFIELD: I gotta go now, Dan. I have to put my house up on the market and escape with my life. Thank you so much.

DANIEL GROSS: Thank you.

BOB GARFIELD: Daniel Gross's blog is DanielGross.net. His piece "The Race to Call the Top" ran as part of New York Magazine's late May real estate coverage. [MUSIC]

BOB GARFIELD: Coming up, a reporter asks whose sperm is it, anyway, and OTM goes back to the science dictionary. This is On the Media, from NPR.