Housing Bubble

Welcome to Silicon Valley! A 1,400-square-foot dump on a quarter acre in Palo Alto sells for $3.4 million. Why so much? Is there oil under the home? It is made of gold? Is it Steve Jobs' house? No, no and no...but it's right next door.

And yes, that's kinda "average" in the housing bubble that has hit Silicon Valley in the modern era. Too little land, too much wealth in a concentrated area...and too many wacky, weird parents who will "pay anything" for a good public school district (never doing the math that, for the price difference in homes, they could hire perpetual tutors for their kids).

Housing Bubbles go with history: Wherever there is a sudden wealth discovery, housing prices go nuts. Think: the discovery of mega oil in South Dakota. Or the discovery of oil in Saudi Arabia hundreds of years ago. Wherever the sudden wealth lives, that's where the housing bubbles follow.