Just about everyone in the pictures is smiling. Perhaps this is truly reflective of the current reality. After all, speculation is being rewarded at the moment, as people buy and flip homes and land the way the day traders were buying and flipping stocks in 1999.After this bubble deflates, I hope Fortune comes back with a cover story that shows how people feel when they lose everything.
It does seem that this is more common here in the Bay Area than elsewhere. My wife went out to dinner with some parents from school and one of them (a mortgage broker) tried to start a conversation with her with the line "I was looking at your file today". Needless to say, she didn't appreciate it, but it points out the fever pitch. He went on to suggest that a fixed rate mortgage is "just an expensive insurance policy". I imagine that it is only the high transaction costs (6% to the Real Estate Agent), the semi-permanent bump to property taxes (which are substantial when you are talking about homes over $1million) and the trouble of packing up and moving which have kept every homeowner from engaging in this.
It certainly smells like a bubble to me.
