DC in the top 5! Woot!
Oh, wait, that's top 5 most expensive places to live. Maybe that's not so great a distinction.
Not surprisingly, housing costs make up the largest portion of cost of living in all the most expensive cities. There's a reason for that - people are idiots. People are willing to pay far too much to live in these places. How is this possible that so many people are paying so much for housing, probably more than they can really afford? Well, I blame the 30-year mortgage, the rise of credit cards, and the lack of a savings culture. We increasingly live mired in debt, totally unprepared should real economic catastrophe strike. If there were some kind of sudden recession or disaster that caused a significant decline in employment, I'd expect we'd see massive bankruptcy, followed by the collapse of the financial sector. People don't have anything socked away in preparation of such an eventuality, aside from perhaps home equity. And that, as Katrina showed us, might not be so sure a bet after all.
I think that we're looking at a housing market in these expensive cities that does not reflect realistic demand, but in fact a significant number of market-distorting forces tied to the availability of debt. To me, that's not just unfortunate for people living here, but is a sign of instability of our system. I hope I'm not still living here by the time it breaks down.
Not surprisingly, housing costs make up the largest portion of cost of living in all the most expensive cities. There's a reason for that - people are idiots. People are willing to pay far too much to live in these places. How is this possible that so many people are paying so much for housing, probably more than they can really afford? Well, I blame the 30-year mortgage, the rise of credit cards, and the lack of a savings culture. We increasingly live mired in debt, totally unprepared should real economic catastrophe strike. If there were some kind of sudden recession or disaster that caused a significant decline in employment, I'd expect we'd see massive bankruptcy, followed by the collapse of the financial sector. People don't have anything socked away in preparation of such an eventuality, aside from perhaps home equity. And that, as Katrina showed us, might not be so sure a bet after all.
I think that we're looking at a housing market in these expensive cities that does not reflect realistic demand, but in fact a significant number of market-distorting forces tied to the availability of debt. To me, that's not just unfortunate for people living here, but is a sign of instability of our system. I hope I'm not still living here by the time it breaks down.
posted by onlooker at 1:48 PM
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