When a house is just a place to live: That's It

The San Francisco Chronicle reports:

In many parts of the country, it would be considered awkward, even impolite, to ask someone what he or she paid for a home. Here, it is the starting point of conversation. I moved into my current home in 1999. The first week I moved in, one of my neighbors walked over (I assumed) to greet me. She did not ask about my profession, the age of my child or the name of my Labrador retriever. Her first question: How much did I pay for the place? Somewhat startled, I gave a straight answer. "Wow," she replied, "that's great news for my retirement."

This is how we have come to think of real estate here. It's not just an investment, or a place to live, it's a source of identity and lifestyle. Not saving enough for retirement? Go ahead, spend away, and when the day comes, cash out and move to Arizona. Are you admiring that shiny new Mercedes in the showroom? Give it a few months, and if your equity rises and interest rates drop - as they always do - you'll be bringing it home with no extra monthly weight on your tax-deductible mortgage. College costs going crazy? Just put it on the equity line.

These ever-escalating prices came with a social cost, even if we did not quite realize it when equity loans were bringing granite countertops, second bathrooms and European vacations that might otherwise require years of bag lunches and summers of tent camping instead of jaunts to Tahiti.

You'll want to read the whole article.