Dr. Housing Bubble — The signs of real estate mania in California

Irrational exuberance is back in fashion in California real estate. The bullish case for real estate is so strong that the echoes of the last housing mania are slowly fading away into economic history. Flipping is now a big part of niche markets and we are starting to see the whacky stories that are common in manias. For example, In San Francisco’s trendy South Beach neighborhood a parking spot sold for $82,000. While that may sound extreme that is simply the behavior that occurs when virtually the entire state is cast under the spell of real estate fever. There can be no wrong and apparently incomes do not matter anymore. We’ve already discussed the reemergence of interest only loans so we are simply experiencing another mania with a different flavor.

Dr. Housing Bubble
The signs of real estate mania in California: San Francisco Parking Spot Sells for $82,000. Median California home price up 25 percent year-over-year. Welcome back interest only loans.

California is the best argument I know of against the rationality assumption. I am getting similar reports from friends on site. It's on again. But this is just the start and there's still money to made before it gets really crazy.