The same thing happened during the Hoover/Roosevelt catastrophe in the 20's/30's/40's. Home prices/values cascaded to 1/3 of their former pre-crash values. Same scenario in play today on a much larger scale.
For every moron that paid $500,000 for a $250,000 home there is some lucky bastid that walked away with that $250,000.
For every moron that maxed out his equity and is now upside down some $250,000 there are others who benefited from the foolishness of that moron.
If you think of your house as a place you live and not as an investment there is no “crisis.”
The “crisis” resulted from people buying more house than they could afford and then hoping to flip it — and left holding the bag when the flip would result in a loss.
Unemployment is still around 10% so that means employment is around 90% so the “unemployed through no fault of their own” meme is generally inaccurate and, more importantly, innaplicable.
Not if one lived within one’s means. Too bad Dave Ramsey wasn’t on the air in the 80’s and early 21st Century days!
Those of us like minded and conservative did not fall into the “I Want it all, and I want it now!” mindset.
Why Canada did not have a Housing Bubble
http://www.freerepublic.com/focus/f-bloggers/2441083/posts
“No Fannie Mae. No Freddie Mac. No Barney Frank. No Chris Dodd.”
15 posted on Saturday, January 30, 2010 8:00:37 PM by Brilliant
oops! 90’s
A quick rediscovery of and return to the Founders' Principles is what Thomas Jefferson recommended in his First Inaugural Address:
"These principles form the bright constellation which has gone before us and guided our steps through an age of revolution and reformation. The wisdom of our sages and the blood of our heroes have been devoted to their attainment. They should be the creed of our political faith, the text of civic instruction, the touchstone by which to try the services of those we trust; and should we wander from them in moments of error or of alarm, let us hasten to retrace our steps and to regain the road which alone leads to peace, liberty, and safety."
For too long, our public discourse has been based on "issues" and short-term political goals, with not enough emphasis placed on how this or that question relates to a principle absolutely essential to our very liberty as a nation. We must return to the "road" described by Jefferson as he took office if liberty is to survive the assaults by both major Parties over the past 100 years.
“However, 40 percent of households do not have a mortgage on their home,...”
http://researchnews.osu.edu/archive/homeequity.htm
It’s the life’s work of the Progressives in America to trash private ownership.
When the Democrats managed to force bad home loans by the tens of millions on the U. S. lending industry, it nearly destroyed this nation. It nearly destroyed a number of nations. It was an insidious plan.
You cause an undue burden on these lending institutions. They pass off the bad paper to other entities, spreading the exposure and immenent failure far and wide. The damage wasn’t limited to the United States either. The Western World was destabilized.
Then ours and other governments stepped in to rescue their nations, spending us all into oblivion in a matter of months.
When the loans defaulted, massive property vacancy rates caused home values to plummet. In some areas the cities are actually bull-dozing properties.
Then you get the media to trump up the failure of the Bush (A CONSERVATIVE’S) administration. “Look what he (THEY) brought upon us.”
We are trillions in debt. We have lost trillions in equity. Homes are devalued. Business vacancies are plentiful, those properties devalued.
You really have to hand it to the people who want to destroy this nation and the Western world. This one initiative was as brilliant as it could be. The best part for them, nobody who contributed to this mess has been taken to task for it. No, they’re hastily fixing it with still more ideas that will come back to haunt us in short order.
Nobody who saw it coming and didn’t do diddly squat to prevent it was seriously taken to task for it either.
Now they’re free to move on to bigger and better things, as if something bigger and better by this standard were possible. Well, handing off power to the United Nations would qualify, so I shouldn’t be too hasty.
When one adds the regulatory liabilities of ownership such as taxes on rainwater runoff, protection of "endangered species" such as wolves and mountain lions, or the threat of eminent domain, it is little wonder why the demand for housing becomes increasingly inelastic. The only value it had beyond shelter was as an inflation hedge or tax shelter. The former is gone, and the latter greatly diminished.
Nothing that can’t be remedied with a bulldozer.
Where to start...
I was able to pull up stakes and move to Kentucky specifically because I rented. I gave my landlord 3 weeks notice and I was done.
And the median income in an area is reduced by a high percentage of citizens owning their homes. The reason is simple: People who own their own home generally limit their search for work to their local economy - even in good times. A person who rents has much more freedom to look anywhere and just move to where the good jobs exist.
Oh, and I paid $1600 a month rent on a home valued at $525k. And to really drill it in, when I left the house it was valued at about $360k. But all it cost me for four years was $1600 a month. A relative pittance.
Who can even own a home?? maybe a so called native American! The rest just rent from the Marxist government.
Huh? It's unjust to have to honor your mortgage contract? I stopped reading right there.
Zuckerman you idiot, it ain't 'free'.
Well, I guess we are lucky. Our home is worth almost twice what we paid for it in 1990, and paid it off almost two years ago. We did NOT buy more than we could afford as a single earner household.
“”The pressure to meet mortgage payments on homes that have lost value has been especially shocking—and unjust—for the millions of unemployed..”
Meeting a contractual obligation is Unjust? Who Knew?
All mirages must vanish.
bttt