Is the US housing market correcting or crashing?

Many financial commentators believe the US housing market is set for a soft landing. But the property market bears all the classic hallmarks of a bubble, says Kevin Duffy of Bearing Asset Management.

Earlier this month economists Gary Shilling and Brian Wesbury squared off on CNBC to discuss the current state of the US housing market.

Wesbury, the younger and far more frequent guest over the past eight years, was bullish: the market is simply 'correcting back to normal.' Shilling, the bear, subscribes to the housing bubble theory. As evidence, last year 40% of home sales were speculative in nature that is, to second home buyers and investors. According to Shilling, it would take a 35% drop in housing prices to restore the long-term balance between median home prices and the Consumer Price Index.

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