[mdorazio]

Don't discount the impact of investors who have no intention of living in their owned real estate, though. For these individuals, there is no salary or commute distance factor to consider, so price sensitivity is very different. Thanks to globalization this is an increasingly large factor in rising real estate prices. See cities like Vancouver as an example.

[philwelch]

Except, in order to profit, the investors have to eventually sell or rent the homes to actual residents, who would have to worry about salaries and commutes. Otherwise it's just a speculative bubble.

[jjeaff]

Do they? Lots of homes in places like BelAir sit empty, visited once or twice a year. Either as status symbols or a place to hide I'll gotten gains.

[philwelch]

BelAir is also a desirable place to live--at least if you're rich--which means eventually the homes can be profitably sold to an actual resident. (And part-time residents are still residents.)