Unreal estate
My wife and I moving back to the City from Napa and have been shocked by the real estate prices. Actually, it’s not the prices so much (we could see them in the listings) it’s what you get for the money and the fact that an $850k house will go for around $1MM! Those of us who lived through the rise and fall of the dot coms should have learned a little caution (and isn’t there an adage about buying low, selling high?). Here’s another thing that gives us pause: a $750k mortgage would mean about a $6k/mo mortgage payment (including taxes and insurance). The house or flat we’d be buying into would rent currently for around $3000. That’s a scary gap. Given rising rates, it’s not hard to imagine the rent vs. buy equation flipping back in favor of renting as it was in the early/mid 90’s. So many dynamics that could pop this bubble.
Anyway, here’s Dan Gilmour on the subject: Dan Gillmor on Grassroots Journalism, Etc.: Promoting the California Housing Bubble