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Dream on

October 27, 2011 - Harry Eagar
“If you've ever dreamed of buying a pied-a-terre in Dublin or a villa in Spain, international real estate experts say now may be the time. In Ireland, housing prices have tumbled to 2002 levels; in Spain, prices are at 2003 levels.” -- Lewis Braham in Bloomberg News.

Good news, I'm sure, for the millions of Americans worried about paying for the homes they are trying to buy here, or making the monthly rent.

One reason I like Bloomberg is that it is generally less fatuous than the other big biz news providers, although even Bloomberg shows little sense of economic history. And this story is pretty fatuous by any measure.

But if you read way down in the story, you do at least find this caution:

“ 'There was a huge crash in Spain because of a lot of overbuilding and fraud,' says Michael Butler, chief executive of Midlan International Resort Realty, an Orlando broker for international property deals. 'Spanish developers would build on land not properly zoned, sell the land, and later on, the regional government would come along and say, “This is illegal. Bulldoze the homes now.” That caused a lack of credibility in the Spanish market.' “ . . .

“In Yugoslavia, for instance, Butler once tried to purchase some commercial property—only to realize it was built during the Communist regime, in which titles and deeds didn’t exist.”

But then, a return to fatuity:

“Mortgages are also sometimes tougher to get in distressed countries than in the U.S., so be prepared to pay cash or borrow against your existing home.”

Sheesh. You'd begin to think the editors at Bloomberg never heard about the great bargains in European homes in the '20s, when, thanks to the devaluation of European currencies, an American with dollars could buy an 80-room chateau in France, with grounds to match, for $17,000 – at a time when, if we are to believe Sinclair Lewis in “Babbitt,” a new garage in the Midwest was going for $8,000.

That seemed less of a deal – especially if you had followed Bloomberg's advice to buy and hold -- in the '30s and still less after 1940.

But then, I never dreamed of a castle in Spain, still less a jerry-built condo on the Costa Brava.


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