"At moments during our house hunt, I felt in my gut that something wasn’t right. We’d go to open houses for $400,000 homes and see lines of couples in their late 20s waiting to get inside. I kept wondering where all the money was coming from. How did all these people make so much?"

“I felt we could afford around $350,000. We called a real estate agent named Mitch, and suddenly we were looking at houses that listed at $500,000 or more.
It felt a little crazy to be shopping for houses that cost half a million dollars, but my income was growing rapidly. Everywhere I looked, people were being rewarded for buying as much house as they could possibly afford, and then some. There was this excitement in the air, almost like static. I started to think that if I didn’t buy a house right then, I would never be able to afford one.
At moments during our house hunt, I felt in my gut that something wasn’t right. We’d go to open houses for $400,000 homes and see lines of couples in their late 20s — younger than we were — waiting to get inside. I kept wondering where all the money was coming from. How did all these people make so much?
But prices just kept rising, and when people kept buying, that made it seem safer. I knew from my work as a financial adviser that following the crowd could be costly. But like everyone else, I felt safer in a crowd.”
- from ‘How a financial professional lost his house’, Carl Richards, NYTimes 9 Nov 2011
Remarkable story, be sure to read the whole piece. Hat-tip to Ray for the link (and to many other readers for alerting us via e-mails: clearly this story resonates for many of us.) -ed.