Monday, February 8, 2010
It’s different here
Looking at the real estate listings in London is like stepping back in time to that unreal, giddy world of three years agoâ€”before Lehman, before subprime, before AIG. But these prices are now, and they contain an ominous message: The London real estate bubble, arguably the biggest one of all, still hasn't popped. Prices are just 9% of their 2007 peaks. If history is any guide, it surely will. Burst bubbles typically fall a long way, and there is no reason to believe this one will be any differentâ€”despite the usual rationalizations you hear in this town today, and which you heard in, say, Florida in 2005 and Tokyo in 1988.