Sound the alarm! We're witnessing another real estate bubble. At least, that's what the mainstream financial press wants to scare us into believing. A recent Bloomberg article, entitled "Brooklyn to California Bubble Threat Grows in Rebound," recounts an all-too familiar tale from the go-go days:

An open house for a five-bedroom brownstone in Brooklyn, New York, priced at $949,000, drew 300 visitors and brought in 50 offers. Three thousand miles away in Menlo Park, California, a one-story home listed for $2 million got six offers last month, including four from builders planning to tear it down to construct a bigger house.

Bidding wars! The ultimate sign of a bubble, right? Not so much…

The Same, But Different

Let's ignore, for a moment, that Bloomberg cherry-picked these examples, and that they're completely out of touch with reality. (The median price for a house in the United States remains below $200,000. Yet

It is remarkable to me to watch the level of bullishness surrounding housing today. From homebuilders to home furnishing stores, the euphoria continues to reach a fever pitch. However lurking beneath this endless torrent of positive news is a reality many are either blind to, or just not willing to believe. By artificially suppressing interest rates by way of its quantitative easing program, the Federal Reserve is sowing the seeds of the next housing correction.

There are multiple reasons why this is the case, however, one in particular stands out. The low interest rates today are fueling housing demand that would not otherwise exist. This dynamic is multifaceted. Demand is fueled both by investors rushing into housing, in search of yield in the form of rental income, in addition to actual home buyers, convinced that home prices have bottomed, and interest rates are bound to rise. Unfortunately, the dynamic

This article is part of a series that provides an ongoing analysis of the changes made to George Soros' U.S. stock portfolio on a quarterly basis. It is based on George Soros's regulatory 13F Form filed on 05/15/2013. Please visit our Tracking Soros Fund Management Holdings article for an idea on how his holdings have progressed over the years and our previous update highlighting the fund's moves during Q4 2012.

Soros Fund Management invests globally and the long positions in the U.S. market reported in the 13F filings represent only ~25% of the overall portfolio. The 13F portfolio increased this quarter from $8.36B to $8.56B. The number of positions also went up 181 to 209. Very small stock positions and large debt holdings together account for the vast majority of the portfolio holdings. U.S. long stock holdings of significant size (>0.5%) represent about 49%