A very accurate real estate idiot ranking...

goes live over at IDEALISTA. What is a flat or house worth? Whatever the value of having a roof over your head is... discounted to the present. Economists look at variables like the average rent to average house prices, and if the ratio is very low, you can normally be sure that the adjustment (back to its long-term average) comes through lower prices, not higher rents. The reason is that rents get paid out of current income, and house prices can be sustained by someone selling his house and buying a bit of extra house elsewhere... without ever being able to afford the price of the new one if he had to finance it all. In Spain, rental ratios were laughably low for some time, around the 2% mark. In the US, we are getting back to numbers around 3.5-4.5%, which seems about right; in Germany, the current ratio is 5-7.5%, meaning that rents are high relative to prices (mainly because prices are low).

All these comparisons are normally a bit doubtful because you have to believe that the average house for sale is like the average house for rent. That may or may not be true, and depends on rental law, etc. But sometimes, you can get it 100% right -- if the same house is available for renting or buying. That is what the good folks at Idealista have used to compile their list. Most of the owners listing their properties at these prices are clearly smoking something interesting -- a house in Asturias (listed without pictures) is for sale for 2.5 million €, or 2,500 p.m. Wow, that's a rental yield of 1.2%! Even the house ranked 80th (from low to high) only produces 2.66%. I would say two things. First of all, Robert Shiller must be right -- you have to believe in behavioral explanations to understand these owners. Second, the extra-slow-motion-deflation of Spain's housing bubble has a long way to go...