The American Enterprise

Ranch houses on fire.(prices and rates)

Here we are, full circle. A quarter century ago, I wrote a piece for The New Republic about soaring home prices. The cover featured a cartoon of a husband and wife entering a dinner party, the husband saying under his breath, "When they start talking real estate, let's leave."

They're talking real estate again, and no wonder. USA Today recently reported on a community in San Jose called Friendly Woods, where a modest ranch house cost $17,600 in 1963. Recently, an immigrant couple from India beat 25 other bidders to purchase the same house for $880,000.

In June, total sales of new and existing homes nationwide set all-time records, and median prices rose at an annual rate of 14. …

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