Despite skyrocketing prices and rock-bottom
interest rates, risks exist.
TULSA, Okla. - The Pink House does not look like
a family establishment. Outside, the battered house on the scruffy
north side of Tulsa is the color of Pepto Bismol — hence the
name. Inside, walls have been painted a nauseating turquoise-and-magenta
pattern. There is a bar where the dining room would be. In the corner
of one cavernous room is a tiny, carpeted stage. “I’ve
always wanted to be a strip club owner,” investor Trisha Allen
quipped as she strolled around the place.
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There Goes the Neighborhood.
Why home prices are about to plummet--and take the recovery with
them.
Let's assume for a moment that enough people get fooled, and
the refinancing boom gets extended for another year. Then what? The
real problem hits. Because if you think Greenspan's being cagey on
refinancing, the truth he's really avoiding talking about is that we're
in the midst of a huge housing bubble, on a scale only seen once before
since the Depression. Worse, the inflated housing market is now in
an historically unique position, as the motor of the rest of the economy.
Within the next year or two, that bubble is likely to burst, and when
it does, it very well may take the American economy down with it.
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Real Estate Lust
When, precisely, did real estate replace sex as the object
of America's basest, guiltiest, most voyeuristic impulses?
When did it come to enjoy dominion over our days and our
dreams? When did a house or an apartment become not just
a place of shelter or an emblem of status or even a considered
investment but an obsession that haunts us no less intensely
than Vladimir Nabokov's nymphet Lolita tortured the imagination
of poor, sick Humbert?
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