Spanish real estate bust leads to ghost towns
Thousands of apartments and houses in Spanish towns go uninhabited after real estate demand evaporates.
Thousands of apartments and houses in Spanish towns go uninhabited after real estate demand evaporates.
The real estate bust in Spain has produced a variety of apartment communities and similar properties that have turned into聽ghost towns as real estate demand has evaporated. See the link for photos. In a town called Sesena:
Any discussion of misallocation of resources on a massive scale would be incomplete without a remembrance of Muang Thong Thani, the small city of condo towers built near Bangkok in Thailand right before the Asian debt crisis of 1997. The towers were built to house approximately 150,000 people, although it鈥檚 unclear if those building have filled up, even fourteen years later. It鈥檚 difficult to tell if the web site has been updated since 2007, but it presently states that 鈥淭he vast majority of these condos, shops, and office buildings have never been occupied since their completion in 1995-97.鈥�
The Commanding Heights documentary (see below) has an interesting section on Muang Thong Thani and on how loose monetary policy in Europe and the US helped to ruin the Thai economy. (Although the video doesn鈥檛 quite put it that way.) It offers some insight into the psychology of real estate booms and how middle class investors are encouraged to invest in doomed real estate by easy money policies.
Also, Mark Thornton noticed last week that the world鈥檚 tallest building is now a distressed property.
Meanwhile, here in the U.S., foreclosure activity may be ramping up following the conclusion (for the most part) of negotiations with loan servicers and the feds and state attorneys general over a massive legal settlement. The conclusion of negotiations signals that the processing of foreclosures, which has slowed significantly during the past year as banks dealt with the controversy, may now be speeding up. Considering that, according to the Mortgage Bankers Association, more than 14 percent of all first-lien mortgage loans in Florida are now sitting in foreclosure (to name the worst one), it looks like they will have plenty of loans to deal with. The Houston Chronicle聽reports, however, that the taxpayers may be footing much of the bill for the financial hit the banks will be taking.
Also this week: Housing starts聽up. Well, they鈥檙e up compared to banner years 2009 and 2010.