A real estate bubble occurs when property prices rise rapidly due to high demand, speculation, and easy access to credit, often exceeding their actual value. This situation can lead to unsustainable growth, where buyers invest in properties expecting prices to continue rising, rather than based on the property's intrinsic worth. When the bubble bursts, prices can plummet, leading to significant financial losses for homeowners and investors. This decline can result in foreclosures and a slowdown in the housing market, affecting the broader economy. Historical examples include the U.S. housing market crash in 2008, which was driven by risky lending practices and overvaluation.