COTTAGES

A friend passed along a Bucks County real estate handout to me Friday night. If one were to design a document solely to trigger feelings of envy and possibly financial inferiority is a prospective home buyer this would be it. Here were page after page of houses, beginning with palazzos in the first pages to more modest but still quite large homes toward the back. What they all had in common were astronomical asking prices. I'm the first to admit that I haven't any sense of what a county estate home will bring in the market. But when I spied a tiny, narrow, ridiculously proportioned row house in Doylestown commanding a price of 695,000. I knew we have moved into freakish territory. Now I'm personally familiar with this structure and always thought it was an architectural folly from the early 19th century. It's much too small and narrow for anything like a family to live in. Even a family of Indonesian hobbit folk would feel cramped in this two story brick shoe box. It look to be the site of an office when last I looked.

Perhaps some millionaire will purchase this for her fantasy office. It would be an interesting place to sit, with one secretary say and administer your personal charity. You could sit taking calls from begging grantees between long lunches. I can imagine no other use for such a building. Unless perhaps for a shop selling bags of diamonds. I mean it's not easy paying of a 700K nut as they say.

So the housing bubble is still very much with us. Now, I'm curiously immune from economic envy for some reason. Still the idea of dwellings as a commodity distorts the field of play for everyone. Not every one competes for diamonds or Bentleys, but we all do need a place to live. As a Bachelor of modest means I've been puzzled by the way that the housing market fails to match the flexibility of the car market. There is a vehicle for almost every purse size in America. Even the illegal aliens can afford some kind of car. If you can't get a good car you can get a junker every so often. Or you get a scooter. But where housing is concerned it's almost impossible to find the only sort of dwelling I can afford and would make sense for me, that is, a cottage.

This cannot be because of the price of construction. I suspect that the cause is the usual suspect, government and the captive industries that learn to maneuver for advantage in the maze of regulation that government creates.

The housing bubble not only creates a mess in our financial institutions but it locks up vast capital in a product, dwelling units that only depreciate in real terms and in turn produce nothing. Imagine what the result would be if we had a tax code that rewarded investing in our nations productive capacity instead of this fantasy investment in ticky tacky that only benefits that awful army of real estate harridans.