Saturday, December 22, 2012

 

Mission Accomplished: Inflating the Housing Bubble

When all you have is ZIRP and Quantitative Easing the solution to every economic problem is another bubble.  Well congratulations Federal Reserve, you've started another bubble.


It didn’t look like a house anyone would pay $400,000 extra for. 
Several walls inside the gray townhouse with blue trim were streaked with water stains. The first floor was noticeably uneven. And termites had dined in front. 
The big pluses: It was 2,850 square feet, had off-street parking, and was in walking distance of Union Station and the bars and restaurants along H Street NE. Then there was the list price: $337,000. Similar houses in the neighborhood were going for closer to $500,000. 
Two weeks and 168 bids later, the house — in the 800 block of Fourth Street NE — was sold this month for $760,951 to an unidentified buyer.  [Emphasis added]

Holy crap.  168 bids.  When we tried to buy a house in Henderson in July and there were 23 bids I thought that was out of control.  168 bids is a feeding frenzy.  More than doubling the asking price is just nuts.  Again, this will not end well.  Don't people ever learn?  


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