Is the German Housing Market overheating?

The IMF is warning there may be a German Housing bubble in the making which might burst if interest rates were to go up. I constructed what I called the BUSE Index for the US housing market by looking at the ratio of “buy” to “sell” searches in the Real Estate category and as it turned out it captured the US housing market fairly well:

Cityscape: A Journal of Policy Development and Research • Volume 18, Number 2 • 2016 U.S. Dept. Housing and Urban Development • Office of Policy Development and Research

I formed the German BUSE index which shows that currently we have a little under 4 buying Google searches for each sell search. While the German particulars are different than the USA both in terms of institutions as well as in terms of fundamentals but also buyer/seller behavior it is worth noting that the quarterly German Housing Price Index is forecasted fairly well by the monthly German BUSE index. As the buyer proliferation drains the sellers rom the market prices rise. If in addition interest rates were to make payments unsustainable prices might indeed come crushing down.