According to the Global House Prices blog: “At the peak of the Japanese real estate bubble, the Imperial Palace in Tokyo was worth more than the entire state of California”.
Looking at the graph of US and Japanese Real estate prices is sobering, the US one is like a ski slope and the Japanese one, a mountain.
But none of this seems to make sense to us Brits. Housing in America still seems cheap, by UK standards, even in New York. Consider that the average house price across the whole of the UK, not just the expensive bits, is over $400,000.
The fact that I could barely afford to buy back the building that I bought in my 20s, despite having earned much more than most, since, means that something is fundamentally out of whack in the UK and by an order of magnitude that is much larger than in the US.
And it’s not just housing. When I was last there I bought a glass of wine in a pub in a smallish town several hours drive from London. It was $17. A drink in a five star hotel in the center of Manhattan is cheaper.
Yet despite this, when I go back to the UK, this is what I hear “house prices may stop rising, but they’ll flatten out, they never go down”. Then I get a lecture about how stupid I was to have sold.
People in the US are waking up, while those in the UK are deluded.