Saturday, April 22, 2006

Bubblicious Bench

Is there a housing bubble? Well, this is a picture of a park bench across from a condominium with 220 units in Northern VA, effectively DC suburbs. There are 47 lock boxes on this bench.

The Washington Post blames this on real estate speculators, some of whom were buying and selling condos in a single day, with 200-500% returns. No doubt speculators are a large part of the bubble, but I have to blame first anyone who bought houses with an ARM or an IO at historically low interest rates, people who financed the purchase of a second home for vacation or investment purposes, and all the banks who permitted people to purchase homes beyond their means. Most speculators were simply turning the crank on the engine that these unrealistic hopes and desires built.

(Photo courtesy of Bubble Meter.)


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