Real estate bubble is global, emphasizing globalization's profound connectivity

■"Stocks? How Boring. If you want to get people really excited these days, just say the two magic words: real estate," by George Anders, Wall Street Journal, 13 June 2005, p. R7.

■"Real Estate, the Global Obsession," by Steve Lohr, New York Times, 12 June 2005, p. WK1.

■"Hot Towns," table, Wall Street Journal, 13 June 2005, p. R3.

We have reached the point in the real estate bubble when everyone seems to be piling on. An unusual percentage of purchases (20-25%, by some estimates) nowadays are by people who have no intention of living on the premisesómeaning either landlords or pure speculators. I am happy to be leaving the East Coast under these insane circumstances for the more reasonable Indy, where price rises occur, but not in double digits. Newport is #9 in the country for absurdly rising prices, and Portsmouth is caught in that same grip of rich people from both Boston (north) and New York (south) buying second homes in our area (more and more houses in our neighborhood are lit up only on weekends).

But this real estate boom is larger than America, reflecting the connectivity of a mobile elite whose second and third homes span continents. Interest rates around the world are increasingly linked, the WSJ tells us, so what goes up together must come down together. Most financial panics with global reach begin with some obvious pattern of over-building, like the Asian Flu of 97-98, so who's to say over-pricing of houses can't do the same trick?

Still, others say what's really driving this is the aging demographics in the Old Core. We get older, and wealthier, so more pressure on home prices becauseóquite simplyómore people can afford more. We are building a house in Indiana, for example, I could only dream about when I started my career.

But I will tell you, the scariest data I've come across in these articles is the "what does one million dollars buy you around the world." Here are the square footage totals for some big cities: London at 841, Dublin at 1152, Barcelona at 1238, San Francisco at 1414, Hong Kong at 1520 and Paris at 1182.

We're renting our three-bedroom apartment in Indiana (1250 square feet) at $1,100 per month. I think I could buy the entire apartment building for less than one million.