Real estate ‘bubble in the making’: Pro

The real estate market might be heading into troubled territory, Dani Babb of The Babb Group said Thursday.

"I think we have another bubble in the making," she said. "We're seeing a lot of numbers that are reminiscent of 2005 and 2006, and I'm concerned about the long-term price stability and ability to maintain the price momentum that we've seen over the last year that's largely been driven by very low interest rates."

On CNBC's "Fast Money," Babb noted that there was a significant driver of the real estate market this time, just like the last bubble.

"We had a bubble last time driven by very easy credit," she said. "We have a bubble this time, potentially, driven by very cheap credit over a long period of time."

Babb, whose firm represents $5 billion in investor funds, also pointed out a sharp increase in prices.

(Read more: Investors move out of housing)

"We've got a median price that's grown 13 percent in the last year, and that's the highest percent gain since 2005," she said.

"So, if all other factors hold the same and consistent – and we expect similar types of gains over the next, maybe say, one to three years – we could see prices back where they were again."

The price action is already appearing in a few markets, Babb added.

"We're already starting to see some signs of that in Miami, Boston, California, where we've got 65 percent of purchases made in cash by investors," she said.

Cash buyers are often also paying a premium of 10 to 15 percent over asking prices, Babb added.

OptionMonster's Jon Najarian said that while many investors look at names like Masco or Toll Brothers to play the real estate market, what they might want to focus on are the websites that cater to buyers and sellers, such as Move, Zillow and Trulia, which "blew away on page views and unique views."

One name Najarian wasn't buying: Realogy.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

— CNBC's Torrey Kleinman contributed research to this report.

Trader disclosure: On Aug. 1, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami's wife, Linda Snow, works at Merck; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long EBAY; Karen Finerman is long M; Karen Finerman is long M; Karen Finerman is long OCN; Karen Finerman is long RLGY; Karen Finerman is long SPY; Karen Finerman is long MDY PUTS; Brian Kelly is long Yen; Brian Kelly is short US dollar; Brian Kelly is short Copper; Brian Kelly is short Silver; Brian Kelly is short British Pound; Brian Kelly is short Aussie Dollar; Jon Najarian is long AAPL; Jon Najarian is long EBAY; Jon Najarian is long OKE; Jon Najarian is long YELP; Jon Najarian is long TWC; Jon Najarian is long MET; Jon Najarian is long TRLA; Jon Najarian is long Z; Jon Najarian is long COP; Jon Najarian is long HUN; Jon Najarian is long MGM; Jon Najarian is long PBR.