Writes Greg Privette:

Hi Lew,

I discovered the Housing Bubble Blog a year or so before the last crash. I found a lot of useful information there and continued to read it occasionally even during “the recovery”. I have been reading it more lately since we are now in “the greatest economy ever”. The post I have copied below seems to go right along with “The Sky Scraper Index” theory (fact?). I especially like the second paragraph. I am sure the person quoted doesn’t realize it, but he makes a very Misessian, Rothbardian, Austrian, statement about the cause of what is happening. I like the very last sentence too: “Everybody had the same idea at the same time”.

From New York 1. “The city’s skyline is always reaching higher, and now it’s undergoing its biggest transformations yet with six buildings sprouting higher than the Empire State Building in the last six years, and more are on the way. When searching the Council on Tall Buildings and Urban Habitat, NY1 found that developers are planning another five buildings taller than 1,300 feet. Real Estate Statistician Jonathan Miller says the building boom began with the financial crises of 2008.”

“‘It was the perfect storm,’ Miller tells NY1. ‘It was Wall Street hungry for higher returns, hedge funds, sovereign wealth funds, private lenders. So, capital was readily available and very inexpensive [and] looking for a home. Everybody had the same idea at the same time.’”

Then there is this later in the same post.

“Prices are down 15 to 40 percent from the high in 2014 says Miller. ‘We’re looking at a housing stock that’s about 40 percent unsold.’ And of those that are sold, Miller explains, more than half are going to out-of-towners buying a second, third or fourth home, amplifying the anger of New Yorkers left in the shadows.”

Basically saying there is anger, because there exists an over-supply of housing at the same time there are willing buyers who can’t afford the houses. Sounds like some type of “free market defect” that government needs to fix!