The Beginning of Giving Houses Away.

I live in London.

For what it's worth, a friend of mine just bought a miniscule one-bedroom, third-floor conversion flat near Chelsea.

£400,000.

That's what, roughtly $700,000?

Isn't that just insane?!

And a typical 3-bedroom house in the suburbs is approaching the £1MM mark...

Just waiting for this bubble to burst.
 
The question is do the people that just bought their $1MM home think its going to $2MM in 10 years. You bet. But, this assumes that the person who makes $100K will make $200K for the same job in 10 years. Or an approx raise of 7-8% for each year for the next 10.
 
Quote from Neoxx:

I live in London.

For what it's worth, a friend of mine just bought a miniscule one-bedroom, third-floor conversion flat near Chelsea.

£400,000.

That's what, roughtly $700,000?

Isn't that just insane?!

And a typical 3-bedroom house in the suburbs is approaching the £1MM mark...

Just waiting for this bubble to burst.
More...

Seems to be a world wide issue ..... The day you cant get people to slave away on subsistance wages - e.g. all their take home income is gone with housing expense taking most of it - then the market will reverse.

In california it basically takes a household income of 300K per year to live comfortably anywhere near the coasts (read even 30 miles inland). The problem is that there are not enough 150K + jobs there to support this pricing. When the pain to even well earning people becomes too extreme you will start to see jobs relocating - like we are seeing now at an accelerating pace - and as teh high paying jobs and families leave, the area is faced with a declining economic base to support the property prices .....
 
L.A. is a distortion. It is all credit and leverage and entertainment industry money. People have money out there, its all car leases, this lease, that lease, but they live high on the hog somehow.

Dont forget the lawyers and doctors (plastic surgeons esp.).
 
It will be funny (or tragic) when anyone has to liquidate their house because they have to. This time who do they blame, they cant sue their broker or can they?
 
Quote from hairdresser:

It will be funny (or tragic) when anyone has to liquidate their house because they have to. This time who do they blame, they cant sue their broker or can they?
More...

Those big builders hire a lot of "faces" to man their sales offices. I would guess enough was said to get some lawyer to claim that they represented their products as investments. Will try to apply investments laws. Just guessing.



John
 
It seems that housing is beginning to roll over. The beauty is now the sellers market, ie my house will only go up group, is starting to realize that this in not necessarily true.

The problem will be most accute, when individuals realize the illiquidity of their "ST trading vehicles" All hell could brake loose and the Bond is not helping matters.
 
Bernanke-Greenspan.jpg
 
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