by Calculated Risk on 12/18/2010 05:06:00 PM

From Suzanne Daley and Raphael Minder at the NY Times: Newly Built Ghost Towns Haunt Banks in Spain

A better known real estate debacle is a sprawling development in Seseña, south of Madrid, one of Spain’s “ghost towns.” It sits in a desert surrounded by empty lots. Twelve whole blocks of brick apartment buildings, about 2,000 apartments, are empty; the rest, only partly occupied. Most of the ground floor commercial space is bricked up.

The boom and bust of Spain’s property sector is astonishing. Over a decade, land prices rose about 500 percent and developers built hundreds of thousands of units — about 800,000 in 2007 alone. Developments sprang up on the outskirts of cities ready to welcome many of the four million immigrants who had settled in Spain, many employed in construction.

This article really captures the craziness of the housing bubble in Spain. Building homes primarily to sell to people who work in construction isn't sustainable - as some areas of the United States discovered too. What were they thinking?