Aug 2, 2004
There are a lot of signs of a real estate bubble forming in the US. Especially as interest rates fell, prices have gone up, especially in a few areas, notably California. Prices may have become unsustainable. Will there be a bust soon? Here's a sensible, if slightly dated article on this from the Washington Monthly.
http://www.washingtonmonthly.com/features/2004/0404.wallace-wells.html
The Economist magazine did a multi-national survey last year, and concluded that this phenomenon was not confined to the US.
http://www.economist.com/surveys/displaystory.cfm?story_id=1794873
This web site shows the housing price index and where prices have gone up a lot.
http://www.cnsfn.com/cgi-bin/cnshpind.pl?dt=12_31_03
In India, there has been a boom in Bangalore and in Gurgaon, and to a limited extent in Hyderabad and Chennai, triggered by IT and ITES spending. The massive rises in real-estate prices in Kerala as a result of the Gulf boom came to an end a while ago, but prices there are still relatively high: $100,000 for a three-bedroom penthouse apartment is not unheard of. A good apartment in Bangalore can easily cost you $150,000. For homes, the sky is the limit. The bubble in India may continue for a bit as interest rates have come down sharply from where they were a few years ago.
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