Google Search Shows Bubble

I’m sitting in a hotel room in rainy Atlanta this afternoon, catching up on my reading. I’ve been away from home a lot and have a big pile of items to read. I appear to be losing the competition as the piles at the office and home continue to grow. I caught up on some of the more important items on this trip.

One of my continuing concerns with our economy is the growing bubble that I see taking place in real estate. Several markets like LA, SF, Las Vegas, Phoenix and others have seen values increase dramatically. Today 31% of the total value of real estate in the USA is in the top 10 markets, compared to only 20% ten years ago. It reminds me of the mid 80s when the real estate under the Imperial Grounds in Tokyo had more value than the entire state of California. It didn’t make sense then and I don’t believe that the values in some of these markets make sense today.

I got on Google to do a couple of searches to see if there was some evidence of hype in real estate. When I typed in real estate I got 109,000,000 hits compared to 78,900,000 for sex; 61,000,000 for God; and 43,100,000 for stock market. Doesn’t that sound like a bubble to you?

Boomtown USA, at 243,000 hits on Google, lagged far behind those words, but we smoked exurbs at 29,400; boonyacks at 284; agurbs at 224 and supercalifragialistic at 5. No bubble yet for Boomtown!