An overlooked aspect of the housing bubble that recently popped was its global nature. Home prices soared in Ireland, Spain, Sweden, France, Australia, South Africa and many other countries in addition to the United States. If it's any consolation, the boom has gone bust everywhere.
A remarkably prescient story in the Economist laid it all out four years ago. Here is how the article began:
NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000. What if the housing boom now turns to bust?
According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.
Pretty good call, huh? Aside from that, I'd like to see a coherent account of how all this happened. I'm sure there is one out there, although I realize this is the sort of thing that will keep economists and historians busy for decades to come. They're still debating the great crash of 1929, after all.