Imagine a brand new modern city in China that was recently built by Beijing with the capacity to house millions of residents and businessman. Sort of like an insta city, just add concrete and water. Now imagine that no one has moved in. A ghost town, but not like ghost towns with run down old buildings and cobwebs, a ghost town that is one of the most modern cities in the world.http://chinadigitaltimes.net/2009/11/chinas-empty-city/
Great find, Hopfrog.It's funny what can happen when government, instead of markets, guides an economy.There are parts of Xi'an that have that ghost town sort of feel. Specifically, the areas south of the Big Wild Goose Pagoda were just completely built up with cranes and nobody really living there. But most of the buildings hadn't been completed. In Ordos, it looks like many of them have been completed.
You know I was thinking about this and I see the same thing here in Vegas. With housing prices so deflated my wife and I decided to drive around town and check out homes and condos that are for sale to see if we might want to upgrade from our condo. What did we find?Vacant buildings everywhere. We checked out a few recently built high rise condos and just looking at the balconies you could see that only about 5% of the units were being lived in. We then went to a newly built master planned community that was really being pushed in an aggressive marketing campaign. It was house after vacant house. In the end we decided that with so much supply, housing prices may still plummet so we have decided to just stay put.I think there has been a construction boom worldwide and its not only China that has overbuilt. Its seems kinda like a construction/industrial complex that needs to constantly build in order to feed its machinations. Of course, eventually it will collapse when it becomes painfully obvious that no one is buying. Just another interesting and disturbing aspect to this modern world I suppose.On the plus side, once you two are in the workforce, you won't have to shell out $400,000 for a $150,000 house. Heck you might even pay $100,000 for that $150,000 house. Soooo, while it is frustrating for you right now just think of the hundreds of thousands of dollars you are gonna be saving. It really offsets the temporary lack of income.
Las Vegas is an excellent counterexample to Ordos. That certainly wasn't government-planned. Things can certainly go awry from markets.Housing prices being down will make it easier once we are ready to make such a purchase. I feel sorry for people who bought in at the height. Thinking about having negative equity on a house is just painful.For the time being, renting will do just fine.
Las Vegas wasn't government planned but the credit that built those houses was. Lowering interest rates below what a market rate would be makes Vegas (as well as America) a surface appearance of a free market but really government planning underneath with its political inclinations towards cheap credit.
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