More evidence from the NYT (reg. req’d) that the housing market is ever more bubblicious:
"We’re going through something very similar in real estate that we didwith stocks," said Robert J. Shiller – a professor of economics atYale, whose prescient book on stocks, "Irrational Exuberance"(Princeton University Press, 2000), appeared just a few months beforetechnology stocks began their slide. "It’s driven by the same forces:that investments can’t go bad; that it has the potential to make yourich; that you’ll regret it if you don’t do it; that it looks expensivebut is really not."
And Harvard Business School grads are all over it. Yeeha, there’s gold in them thar hills!
Andrew Farquharson, a member of the [HBS] class of 1999, said he recentlyteamed up with a high school friend to buy a home in the Central Valleyof California "out of pure speculation." He knows of other classmateswho have made similar investments.
"I look at this as ashort-term investment," said Mr. Farquharson, 36, who works for aventure capital firm, "and plan to unload it as soon as things lookdangerous."
Some people might look at it as a roof over their heads. Quaint, I know.
Well, never you worry, because Lt. Gov. Kerry Healey’s got a plan for skyrocketing real estate prices — kick Grandma and Grandpa out of the manse and move in! Nice. I’m a liberal who believes in moderate redistribution of wealth, but that kind of turbo-charged utilitarianism is a little much for me.
A real problem is that we really don’t know how to develop property properly around here to soak up demand. In Chicago, there are 20+ miles of lakefront, all along which are high-rise apartment buildings. Downtown, these are for the rich, but north and south of downtown these are affordable for middle class people: teachers, social workers, cops. They’re perfectly decent places to live. In MA we’ve got nothing comparable to that. We’ve got tremendous density in this area, but because of zoning laws, labyrinthine affordable housing requirements, and old-fashioned NIMBYism, we can’t build our way out of the bubble. And a lot of people just can’t afford it anymore.