The Midwest In Me, “You paid WHAT for that?!”
I grew up a military brat moving from place to place in what was mostly middle America. Like the hobbits of middle Earth who were amazed at the new sites they saw as they returned the ring to the fires of Mount Doom, I am constantly astonished when I hear what people pay for real estate in other parts of the country. A 900 square foot cottage in California for how many hundreds of thousands - and it needs some work!? Ay yi yi.
Today, the news is out that values of apartments in Manhatten continue to climb though there are many job losses, causing concern that the prices will soon begin to erode.
After the stock market crash of 1987, it took two years for Manhattan real estate prices to drop… When they did drop, the market became more troubled because the slowdown coincided with developers taking advantage of tax incentives to build thousands of new apartments. At the same time, thousands of rentals were being converted into co-ops. Many builders had concentrated on building only smaller apartments that were attractive to investors looking to rent them out. All of this inventory meant that it took until the mid-1990s for prices to recover from overbuilding.
Meanwhile, the average price of an apartment in Manhattan rose to $1.5 MILLION in the third quarter of this year. I wonder what the price per square foot is there.
If you’re interested in finding an expensive place to live, Miami rates at #10. Other cities include Seattle, Sacramento, Boston, Washington, DC, San Diego, Los Angeles, New York, San Francisco, and #1 is SAN JOSE.
Of course, there are countless great reasons to live in these cities ranging from cultural to educational opportunities, recreation, entertainment, jobs.
And now that the massive bailout plan for the financial markets has passed and been signed into law today, perhaps people can again afford to buy homes. According to Forbes, it’s unclear when credit-crunched banks can begin selling their troubled loans to the Fed. Some of the fodder of the bill include,
–Provides the government with warrants to obtain an equity stake in companies. This helps ensure that taxpayers share in future gains of companies that are bailed out.
–Limits excessive executive compensation for some companies. Any firm that sells more than $300 million in troubled assets to the government is also subject to more taxes.
–Establishes an oversight board and special inspector general to act as a watchdog.
–Requires the Treasury secretary to regularly report to Congress the details of all financial transactions under the bailout.
–Allows federal agencies to modify troubled mortgage loans.
We’ll see the results of the bill flesh out in the coming months. But for this next week, I’m going to try to forget about it all as I take a vacation to the white sandy beaches of Destin, Florida, sipping cold drinks and reading a good book. See you October 13th unless I can find a wireless connection!
