March 18, 2014

BUY LOW. SELL HIGH. The Coming Real Estate Bubble.

The point is, something insane has happened to Washington real estate prices in those intervening years. There’s a feeding frenzy over single-family homes in neighborhoods that are barely within walking distance of a metro. . . .

Of course, I can name reasons that prices should have zoomed up in 2012 and 2013. Washington’s job market is far more insulated from economic vicissitudes than the rest of the nation — indeed, the extra government spending creates jobs here (though not as many as you might think). So it’s not necessarily surprising that more affluent professionals are trying to get their hands on the one thing Washington isn’t making any more of: single-family homes.

But that doesn’t really explain why the same buying frenzy is happening in San Francisco.

OK, tech billionaires. But what about New York, where you also hear the same stories about Brooklyn neighborhoods? Finance may not have suffered as much as you wanted, but the Masters of the Universe have not become richer, or more numerous, since 2008.

Actually, what you’re seeing is exactly what you’d expect in an administration that drives wealth toward urban gentry liberals.