Housing bubble peaking worldwide: "The great American housing bubble, like its obese counterparts in the UK, Ireland, the Netherlands, Spain, and Australia, is a classical zero-sum game. Without generating an atom of new wealth, land inflation ruthlessly redistributes wealth from asset-seekers to asset-holders, reinforcing divisions within as well as between social classes. A young schoolteacher in San Diego who rents an apartment, for example, now faces an annual housing cost ($24,000 for a two-bedroom in a central area) equivalent to two-thirds of her income. Conversely, an older school bus-driver who owns a modest home in the same neighborhood may have 'earned' almost as much from housing inflation as from his unionized job.

"The current housing bubble is the bastard offspring of the stock-market bubble of the mid-1990s. Housing prices, especially on the West Coast and in the East's Bos-Wash corridor, began to rocket in the second half of 1995 as dot-com profits were ploughed into real estate. The boom has been sustained by sensationally low mortgage rates, thanks principally to the willingness of China to buy vast amounts of U.S. Treasury bonds despite their low or negative yields. Beijing has been willing to subsidize American mortgage borrowers as the price for keeping the door open to Chinese exports.

"In a bubble city like San Diego, for instance, less than 15% of the population earns enough to finance the cost of a median-value new home."

Housing bubble peaking worldwide: "The great American housing bubble, like its obese counterparts in the UK, Ireland, the Netherlands, Spain, and Australia, is a classical zero-sum game. Without generating an atom of new wealth, land inflation ruthlessly redistributes wealth from asset-seekers to asset-holders, reinforcing divisions within as well as between social classes. A young schoolteacher in San Diego who rents an apartment, for example, now faces an annual housing cost ($24,000 for a two-bedroom in a central area) equivalent to two-thirds of her income. Conversely, an older school bus-driver who owns a modest home in the same neighborhood may have 'earned' almost as much from housing inflation as from his unionized job.

"The current housing bubble is the bastard offspring of the stock-market bubble of the mid-1990s. Housing prices, especially on the West Coast and in the East's Bos-Wash corridor, began to rocket in the second half of 1995 as dot-com profits were ploughed into real estate. The boom has been sustained by sensationally low mortgage rates, thanks principally to the willingness of China to buy vast amounts of U.S. Treasury bonds despite their low or negative yields. Beijing has been willing to subsidize American mortgage borrowers as the price for keeping the door open to Chinese exports.

"In a bubble city like San Diego, for instance, less than 15% of the population earns enough to finance the cost of a median-value new home."