autumn_shutterstock_86326951_1Home prices are rising at unsustainable double-digit rates both in Portland and across the country.

Well-priced, well-located homes sell in hours, inventories are as tight as they’ve ever been and home builders are racing to break ground on new developments.

Like it or not, bubble talk is filling the airways.

But is it too early? Are home prices unsustainably high? Is the market headed to another crash?

It depends on who is talking.

In one of the more humorous takes on the housing market, surveyed 100,000 “financially successful sugar daddies” about the economy. A whopping 85 percent of those who answered believe the residential real estate market has entered bubble territory.

The term has cropped up in numerous housing-related stories, including today’s Wall Street Journal (“Phoenix’s Housing Market: Saying ‘Bubble’ Doesn’t Make It True”).

The cooler heads at Standard & Poor’s Ratings Services, which produces the widely-watched Case-Shiller home price indices, take a similar view.

Talk of a bubble may be premature, according to S&P analysts Beth Ann Bovino and Erkan Erturk, in a report released June 17.

Here’s why S&P isn’t worried about a housing bubble.

Prices rising, but still lag

U.S. home prices have recovered, but have only returned to 2003 levels. S&P projects home prices will rise 11 percent in 2013, the biggest jump in seven years. It pays to remember that a 50 percent jump after a 50 percent tumble represents a 25 percent decline, it said.

Housing starts rising, but still lag

S&P projects about 1 million housing starts in 2013 and 1.3 million in 2014, annual increases of 28 percent and 29 percent, respectively. But the 50-year average is about 1.5 million new homes a year, meaning the market still is falling behind.

Wendy Culverwell Real Estate Daily editor- Portland Business Journal