What is it about the American dream to own a house even when prices are in the stratosphere? Whatever is the drive, I only wish for that crash to arrive soon. I know a lot of people shudder at the thought of such an event, but the inevitable fact is, what goes up must come down. And here's my top 5 reasons why I wish for it to happen soon.
1- Most of us are already awaiting the crash anyways. It's stressful to keep waiting for an event, only to pick up the newspaper everyday and realize that that prices have continued to march upward. The higher they go, the harder they'd fall. Let's get the pain over with. The sooner it happens, the sooner we can get off the obsession and get on with something else.
2- The home ownership aspirations is supposed to instill a certain kind of pride and closeness in the neighborhoods. That feeling is now gone. With so many flippers working the market, it's a miracle if you get chance to get to know your neighbors before they move on to higher pastures. People seem to no longer view their homes as places of dwelling. Homes have become another investment vehicle, like stocks and bonds, to be bought and sold for quick profits.
3- In my wooded neighborhood we have numerous sections of land that have fallen in the hands of builders. Quality of life means nothing to these greedy bunch. They swoop in, raze the land, build houses, sell quickly and move on to destroy another parcel. When the incentive to make easy money is so high, the environment suffers. Remove the incentive, and most of these builders would scatter, giving a chance for the few remaining trees to survive the onslaught.
4- Someday I'd like to sell my small house and move into a bigger one, but that wish appears to be a pipe dream. I don't know who these people are that are snapping up the multi-million dollar mansions that are sprouting like mushrooms, but I don't see myself capable to affording one. Sure, the interest rates are low and lenders now have creative ways to stretch budgets with their buy-now-pay-later schemes, but at these prices who can enjoy a new home when even making minimum payment is a fight for survival.
5- It's a known fact that many homeowners are up to their eyeballs in debt. With every appreciation, they get more brazen and upgrade to bigger homes with dreams of higher returns. What happens when home prices finally retreat and leave them upside down in their obligations. I can almost see throngs of people writhing in pain when they realize they owe more on their mortgages than their houses are worth. The double-whammy is the tougher bankruptcy laws that make it all but impossible to get out of the heavy debt without getting wiped out in the process. I hope it doesn't happen, but I can't help having sad images of many families awash in tears as they are forced out of their luxury homes.
They said it wouldn't happen to the stock market, and it did. They said it wouldn't happen to gold, and it did. One thing all bubbles have in common is that they eventually burst. I can only hope that when it happens to the housing market, we didn't have to wait too long. Surely another bubble is already being formed quietly to follow on the ruins of this one. One always succeeds another.
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