From San Francisco and Seattle to Moscow and Shanghai, prices for prime residential property are surging, even as overall national numbers in some markets continue to be depressed amid worries of global recession and a real-estate bubble. The triumph of the glamour cities turns conventional wisdom on its headâ€”for quite a while, experts including Yale’s Robert Shiller have been predicting that these cities, having been hyped the most, would likely fall farthest, fastest. The decoupling of national and local real-estate trends, which were once much more closely linked, reflects the lives of the new “superprime” property buyers themselves, roughly 50 percent of whom are expatriates, according to the global-property research firm Jones Lang LaSalle. While globalization has allowed money, but not necessarily people, to roam the world more freely, CaÃ±as and his colleagues are an exceptionâ€”they float on a cushion of international capital, largely immune to regional concerns, and are flush with cash.
I found this article fascinating because when I lived in New York I saw on the ground exactly this phenomenon. As rents and property values grew, the amount of money being made by my friends and colleagues was going down. There was a “Disneylandificiation” going on in Manhattan, and I noticed the same thing in LA, San Francisco and Seattle. I knew locals weren’t driving the economy. So what gives?
I feel we are seeing the manifestation of what McLuhan described when he said all the megalopolises of the world were now connected by air travel which are now like sky subways. It is one continuous metropolis, networked by the global financial elites. Who are they? I’m not sure, but the article describes many coming from finance and insurance, maybe entertainment too. I’m now wondering if cities will also be a bit like walled city states with airports serving as the equivelent of castle gateways of medieval times. Only those with passports and papers and the means to travel by air will have access to these playgrounds. As for the service sector, they will continue to be illegals and a growing undereducated underclass. This is only one scenario, though, and I hope workers, artists and people who traditionally innovate continue to find their niches in beautiful and safe places.