The law of unintended consequences could be coming back to bite Federal Reserve Chairman Ben Bernanke. The S&P/Case-Shiller index showed strong signs of housing recovery in January.

Headlines from media outlets such as Reuters declared “Home Prices Log Best Gain Since 2006: Case-Shiller.” However, the story is far more nuanced and complex.

First, it is important to look at the housing bubble. Nearly everyone will agree that the housing bubble was caused in part by low interest rates put in place by former Fed Chairman Alan Greenspan.

The low interest rates in 2003 helped the economy recover and the housing market to boom from 2004 through 2007, when it peaked. Housing then had a big decline from sometime in 2007 to 2011. Housing stabilized in 2011 and 2012, whether this is temporary or permanent we will discuss later on in this article.

However, some parts of the country felt the boom and the bust more than others did. Areas like New York City barely felt the roller coaster, whereas places like Phoenix saw home prices more than double from early 2000s to 2006. Home prices then fell over 50 percent from the peak, ending up at the same pre-boom level.

Why is this important? Places like Phoenix are really leading the recovery now. What did not make the headlines this week was the 23 percent jump in the 12 months through November 2012 in home prices.

After years of unaccountable housing programs from the Obama administration and zero percent interest rates from the Fed, housing has started to recover. However, the uneven recovery could be a huge problem for the Fed to deal with going forward.

First a bit more data on the “bubble areas.” The Case-Shiller index was invented by the famous economist Robert Shiller, who is a rarity in the fact that although his political views are known, he is interested in economics not political agenda (which is perhaps one reason why he has never taken a job in government).

Shiller himself believes that parts of the country are experiencing a housing bubble. In an August 2012 interview with Fox Business Network, Shiller stated, “I think in cities like Phoenix and San Francisco, we might be seeing something pretty big developing. People there are very speculative-minded.” He reiterated that same point at the end of the interview.

Since that interview, the situation has only gotten worse. Now Bernanke is in a far bigger dilemma. What if you want to boost or cool housing prices only in certain areas of the country? You cannot only change interest rates in parts of the United States (although I am sure someone will come up with a crazy idea like that).

So assuming the current policy is correct (a big assumption), what if housing is still weak in parts of the United States, but booming in other places? How can the Fed boost housing in one area while cooling it in another?

There is no easy answer to this question. The Fed, which helped induce the housing bubble of the mid-2000s, could be creating a far more problematic one today.