During the financial crisis, some professional investors did manage to profit by correctly forecasting home price declines. They used mortgage derivatives such as collateralized debt obligations to place their bets. John Paulson of Paulson & Company is well known for very successfully profiting from his prediction of trouble in the housing market. But mortgages are not homes, and he and others like him did not beat down the emerging housing bubble before it grew out of proportion.

In 2006, in collaboration with several colleagues and me, the Chicago Mercantile Exchange set up a futures market for single-family homes in 10 United States cities. This market is still going today, but it is not very active and it can be used to place only a small bet that home prices will fall.

There is a way for smart money to profit from an understanding of high prices. It is to build new houses and sell them before prices fall. This is a time-consuming process but it is what we are starting to see now, as housing starts and permits data show.

Still, despite rising prices, at present, exuberant investors do not dominate the domestic housing market over all. The Pulsenomics survey of household heads in January showed that national home price expectations are modest: on average increases of only 3.7 percent a year are expected for the next 10 years.

Extravagant expectations do lurk in parts of the market. In the 2015 Yale School of Management survey of recent home buyers that Karl Case of Wellesley College, Anne Thompson of Dodge Data and Analytics and I direct, our preliminary results confirmed the overall Pulsenomics conclusion yet found that some people have strikingly unrealistic expectations.

In San Francisco, for example, we found that while the median expectation for annual home price increases over the next 10 years was only 5 percent, a quarter of the respondents said they thought prices would increase each year by 10 percent or more. That would mean a net 150 percent increase in a decade. These people are apparently not thinking about the supply response that so big a price increase would generate. People like this could bid prices in some places so high that eventually the local market will collapse. Yet the smart money can’t find a profitable way to correct such errors today.

The bottom line is that there is no reason to assume that the real estate market is even close to efficient. You may want to buy a house if you love it and can afford it. But remember that you cannot safely rely on “comparable sales” to judge that the price is fair. The market isn’t efficient enough for that.