The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: MulhollandDrive who wrote (105404)	2/16/2008 4:09:26 PM
From: lifeisgood	Read Replies (2) of 306849

i'm originally from the midwest, there wasn't a RE bubble there....when it was said that there was not a national RE bubble, i tend to agree with that... I live in the midwest now. The midwest too has experienced the effects of overleverage and easy credit. It didn't necessarily show up in inflated home prices. It did show up in other places. For example Iowans overspent on bigscreens just like Floridians did (on credit of course). Iowans misused MEW's just like everyone else (and are underwater on their car loans and credit cards like everywhere else). Currently, the midwest is going through a bubble of another flavor. Farm land prices. Prime farm land prices have tripled in the past 5 years. Is it sustainable? Not any more than Florida home price appreciation was sustainable. I know, I know, grain prices will sustain farm land prices, ethenol expansion will too, blah blah blah. Similar theories were proposed for Florida housing (e.g., baby boomers have to retire somewhere). I recently sold inherited farmland for $4000/acre. That is insane when considering that the same land sold for $600 - $800 10 years ago. Ultimately, things we buy (homes, farmland, etc.) must be priced according to income level. There is simply no long-term way around this basic economic fact. If incomes don't triple then things you buy with that income cannot triple over the long term. best... LIG

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