That's a frequent lament about the U.S. housing market (and now the entire world economy). But some economists did warn that a bubble was forming long before it popped. (I did a Q&A with one last year.)
Now comes Bruce Bartlett, a former Treasury Department economist and current columnist for Forbes.com, who -- starting in 2001 -- kept a file of articles, reports and speeches on the housing bubble. Yes, '01. Here's what he writes:
There were, in fact, many warnings dating back more than seven years--but in the euphoria of rising home prices, no one listened. As time went by and no crash occurred, many of those doing the warning lost credibility or decided that perhaps they were wrong and moved on to other issues.
... Unfortunately, it is in the nature of economic and financial forecasting that being right too soon is insignificantly different from just being wrong. And forecasters that are wrong when most of their community is also wrong never suffer for it. The trick is to be right just a little bit sooner than everyone else--but only a little bit.
Not among the economists who were right sooner than the crowd: Alan Greenspan, who -- Bartlett says -- "was still saying that the housing market was nothing to be concerned about" in October 2004 when he was Fed chairman.
But in fairness, I see a New York Times story in February of that year about a warning Greenspan did issue:
Mr. Greenspan said that Fannie Mae and Freddie Mac, which buy up and repackage billions of dollars' worth of mortgages every year, have grown so rapidly and accumulated so much debt that they cannot adequately hedge against the risks of financial crises.