Bubble Watch: Desert McMansions Edition
Yesterday we wondered what the next bubble will be, and when it will pop, thereby destroying us all. We intend to keep an eye on all possible bubbles from now until the next crash, so that we may claim to have "predicted" it. Today's candidate: flimsy homes in desert wastelands.
You might have thought that after crashing harder than anywhere else in America during the collapse of the last real estate bubble, sun-scorched sandpiles like Phoenix and Las Vegas would have become less attractive to investors (and, of course, residents, what with all the treacherous cacti). This goes to show that you do not understand economics as well as any halfway decent hedge fund manager, who knows that you must buy shitty real estate when it is cheap and hold it until it is expensive and then hold it a little longer out of greed until it collapses again and loses your investors money, but you've already been paid, so who gives a fuck?
The latest on desert living, via Bloomberg:
In May, Phoenix prices jumped 21 percent and in Las Vegas, they rose 23 percent from a year earlier. Nationally, home prices were up 12 percent from a year ago, the most since the beginning of 2006, according to the S&P/Case-Shiller index of 20 cities...
“The builders said last year that there’s no way they would pay more than $200,000 an acre for [Vegas] land,” he said. “Now, they’re saying there’s no way they’ll pay more than $400,000.”
By god there is no better contender for "Bubble Most Likely to Pop" than massive air-conditioned box homes embedded in urban sprawl miles outside a city that is itself an artificial and unsustainable pile of plastic and drywall sitting atop a harsh desert, which will inevitably be reclaimed by geckos and sand flies within a century's time. Just wait till all those homeowners wake up one day and realize their investments have gone sour. Henderson, Nevada will be a god damn ghost town faster than you can say "One ticket to anywhere not in the middle of a parched and uninhabitable desert, please."
Other bubble contenders today: personal debt, UK housing, and Tim Tebow.
