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Yale economics professor Robert Shiller is known for making the right call at the right time. His prescient book Irrational Exuberance was published weeks before the tech market crashed in March, 2000. The second edition of that book sounds a warning call on the North American real estate market.

"This is the biggest national bubble that the U.S. has seen in over a century," Prof. Shiller told Jim O'Connell on Report on Business Television. He says a violent correction is imminent. "When people are flocking into the housing market buying more and more houses, it's not a sustainable situation."

The bubble is building in "glamour cities and glamour vacation areas" in the United States and Canada. Ominously, Prof. Shiller says that "Vancouver is the most bubbly city in the world." He says that city has a history of volatile housing prices but he doesn't see the same level of bubbliness in the rest of the country's housing market.

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However, Prof. Shiller can't say when the North American real estate bubble will burst. He says it tends to be a "psychological phenomenon" and "any bubble is a tug of war between the enthusiasts and the doubters."

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