Gary send in these very interesting comments:
Geez, just as the dot.com distorted the allocation of capital and resources (i.e., too much broadband, not enough energy infrastructure), so to is the housing bubble!
What is he referring to? He was pointing to this article in the Washington Post:
"It feels as if Playboy’s Playmate of the Month for May is speaking for the entire country.
Lauderdale native Jamie Westenhiser, 23, told the magazine recently
that she is ditching her modeling career to take up real estate
In the magazine’s May issue, Westenhiser poses in her
lacy lavender baby doll, wearing nothing else except furry boots,
leaning on a computer desk next to a stack of books with titles
including "All About Escrow" and "Real Estate Principles." In her
"playmate data sheet," she writes that her ambition in life is to have
a "successful career in real estate."
That’s correct, a potentially lucrative career as a model is being tossed aside for real estate investing. Gary calls that a "misallocation of resources."
And apparently, you don’t need to be a scantily clad purty young thing to do it:
"A recent study by the National Association of Realtors showed that almost 25 percent of homes bought in 2004 in the United States were bought as investments. That’s up a whopping 14.4 percent, compared with 2003. David Lereah, chief economist for the association, said the organization was surprised by how big the investors’ share of the market had become."
Those numbers initially sounded pretty high to me; I;ve been seeing more and more confirmation in other data that they might be accurate after all.
My position that this isn’t a bubble looks less tenable with each passing day . . .
Everybody’s an Investor Now
With Home Prices Rising, Investors Play a Risky Game of Anticipation
Washington Post Staff Writer
Saturday, May 21, 2005; F01