Thursday, March 27, 2008

When greed exceeds your needs…

posted by Bill Arnett @ 12:54 PM Permalink

…eventually the cows come home to roost. Or somethin' like that.

Anywho, I guess this is my way of commenting on the housing market crashing and burning.

Homeowners, most of you deserve the problems you're having, with the singular exception of the poor bastids who were snookered into a house that lenders knew damn well they could not afford.

The rest of people having problems are those who bought the notion that "…property ALWAYS gains in value so buy, buy, buy!"

And that is what made home ownership a fantasy for many of us.

Example: The house in which I live, and the surrounding homes, were all built about sixty years ago. When I rented this joint seven years ago homes in this neighborhood sold for around $300,000 (which I considered outrageous, even then). Right before this crash people were selling these same homes for well over $500,000. Now sellers can't even get people to look at the houses for sale here, many of which have been on sale for over a year or more. "Open House" days must be very dreary for realtors these days 'cause there ain't nothing being sold here.

Once the dust settles and house prices come down from the stratosphere to meet up with the reality of what the homes are actually worth then many more people will be able to realize their dream of home ownership.

Until people understand that raising the price of sixty year old houses by a quarter of a million dollars in less than seven years is a bad idea, leading to problems such as those that now exist, I'll be staying out of the market.

Maybe I just abhor the idea of buying things you can ill afford even if you believe the myth that property always gains value.

When a myth is exposed as a lie is it still a myth?

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