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Housing is still rising…The LA Times reports that abodes in LA County rose 21% last year. Down in La Jolla, says Richard Russell, they’re up 27%. And the median price for a house in Orange County rose to $551,000 last year.

Everyone in the state of California must be a genius. Or, at least he thinks so.

But here too, we see a mystery…and an existential question: Why would a house be worth more one year than it was the last? Does its roof shed water better? Is its rec room less of a wreck than it was 12 months ago? Is it warmer? Cuter?

On the contrary, does it not render exactly the same service it did last year?

Capital growth is a fraud; we keep repeating ourselves.

Here in London properties have already begun to fall. Our colleague Merryn Somerset Webb reports that she put her flat up for sale two months ago. So far, only one person has looked at it, even though it is located in a desirable part of town and priced below similar apartments in the same building. London led the global property boom up…it seems to be leading it down too.

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.

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