Originally published in The Street

By Damian Maldonado

Forgive homeowners and prospective buyers for feeling a little déjà vu about the recent run-ups in the real estate and stock markets.

After all, eight or nine years ago, both markets were ascending into the sky only to crash and burn like the Hindenburg in a matter of months.

Lately, people have been asking — particularly here in the Denver area where home price increases have been second only to San Francisco — whether there’s a bubble in real estate prices.

As both a real estate industry CEO and a self-directed stock market investor, I get more nervous these days about my equities investments. Stock markets do have a history of regularly rising and falling by double digits, even if equities outperform real estate over the very long term.

We are presently six years and three months into a bull market, the third longest in history, after a run lasting seven years and two months that ended in August 1956 and the 12-year-and-four-month marathon that ended in March 2000.

A case can be made that a modest decline in the stock market will drive cash directly into housing or into bonds, which would reduce interest rates, to the benefit of real estate buyers.

If the stock market decline is unusually steep, however, as it was in the last decade, that could depress the overall economy in ways and to a degree that housing demand drops.

The rise and fall of real estate remains largely a local process, however, tied to the vagaries of city, state and regional economies, often linked to industries such as oil, automobiles or construction.

Overbuilding, too, especially in areas with few natural or zoning barriers to expansion, such as in Las Vegas or Phoenix, can also depress local housing prices. In both of these markets, real estate prices have yet to return to their old highs.

Another local caveat is the strong dollar, which hurts the purchasing power of foreign buyers, generally on the East and West Coasts. When those buyers vanish, as they periodically do, some markets, such as Miami, suffer, sometimes in isolation from much of the rest of nation.

Homeowners and buyers often err in judgment, however, when they project short-term changes in price — high or low — into the future. They should look instead at a local market’s long-term performance, as they are making a long-term investment. A home, after all, isn’t a penny stock.

Still, the premise that a pop in one market bubble always leads to another is full of hot air.