All I really want is to secure a small piece of the American Dream without leveraging my entire future. Is affordable housing too much to ask? Apparently so.
As of my last quick peak at the market this morning, it appears my dream might come with some serious consequences for the entire country. While I knew some casualties were going to be necessary in the RE and associated construction and mortgage industries, I didn't think it would create a panic in the overall economy.
This reminds me of an anecdote we use a lot in my industry. If a frog is put in a pot of boiling water...it knows to jump out right way. However if its put in a pot of room temp water that is on the stove, it doesn't realize the water is too hot until its too late, because the water is heating gradually.
Been on a crazy busy travel schedule lately, but I have a special treat I hope to post stats on tomorrow.
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7 comments:
It wasn't just housing, the big boys on Wall Street have set up such a huge house of cards something was bound to blow it down. Just look at the size of the derivatives market (4 times world GDP!) and tell me that trouble wasn't brewing for the economy, housing slump or no housing slump. This whole economy is make believe and a sick game of chance.
I have always wondered about a lot of the people who post to these blogs. They seem to get a real kick over watching the housing market implode, figuring that since they either don't own a house or already sold it, that the pain current homeowners are going through somehow will not affect them.
Don't get me wrong, I think house prices shot up to ridiculous extremes. Prices are still too high and need to fall further. But if prices crash as far and as fast as some on these blogs predict, then it won't matter how far they fall. You still won't be able to buy because you won't have a job! (assuming stricter lending standards requiring documented income remain in place).
mbc - la, la, la - they might be affected by other people losing money?
"You still won't be able to buy because you won't have a job!"
Maybe you won't but the hubbie and I ducked for cover long ago. We'll be fine.
Gwyn - I can appreciate the fact that some are better prepared for the rough waters ahead. I just think that if values fall by 50 percent, as Perfect Storm and others have predicted, then it (that magnitude of decline) will either be the cause of, or the result of, the economy going completely into the toilet.
None of us live on an island. If the economy tanks like that and we experience a severe recession, it won't be fun for anyone, no matter how prepared they are. For instance, government revenue will dry up. I know a lot of people think the only thing government is good for is wasting money, but wait until schools cut programs to the bone, librarys close, etc. and the hollering and finger pointing will start.
mbc,
In 01' I watched my $55 hr salary go to $12 just to keep eating. Plus my mother was a young girl during the depression in Germany. She raised me on stories of that period and WW2. I know what's coming.
Now are many of my friends going to get hurt? yup. I tried to help them understand. Not much else I could do. Am I happy about it? Nope. It just is.
Property values can go back 40% or more because that's where they should be. Am I happy about that? Hell yes.
mbc, you are wrong.
I have two children who are being terribly hurt by the current market, both of whom believed that RE would only go up/if they didn't buy now they'd be locked out forever/they could refinance out of the ARMs they used to afford the payments. One of them is under so much stress, I really fear for his marriage.
My ex's business, which also employs the child above and several family friends and other very nice people, is in serious trouble due to the slowdown in RE sales.
I don't get a kick out of this. And I have felt all month like Buying Time is feeling: all I wanted was for RE prices to return to normal so that I can buy and settle in and grow old. I don't want to rent the rest of my life, no matter how nice the rental.
Am I happy I listened to advice on blogs 2 years ago and sold my condo? well, DUH.
I've learned a lot from the blogs, and I'm extremely grateful.
And why did no one worry about the effect on the economy when RE was doubling and tripling in cost over the past few years? Why did no one worry about the affordability of housing for the median family?
Why did no one question how consumer spending could continue to fuel "economic growth" when the average consumer has NOT experienced the growth in income that the average corporation or the average CEO has? Why did no one put on the brakes in order to avoid this crash?
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