How can a cheap American buy a HOUSE in the 1st. World ?

How can a cheap American buy a white HOUSE in the 1st. World ?

Easy, Wall Street can arrange it every time.

 

There is a good side to the housing bubble bursting. It had to happen eventually. Housing and property values were growing disproportionate to income in the last 10 years.

 

A house is a roof over your head. The mad property market destroyed Western industry because there was no investment left over as a lot of people thought buying and renovating property quaranteed a better return.

 

Very perceptive. Home ownership and Real estate investment robs industry and society of productive capital and generates debt and transaction profits..

Simply look at the huge personal debt explosion that formed in the UK after Margret Thatcher changed the rules to encourage home ownership.

Bricks and mortar are poor ways to make your society competitive .

Observe home ownership rates in highly competitive countries like Switzerland.

Competition is the law of the jungle.

Laws should be enacted to discourage Government subsidized real estate speculation , consumption and encourage savings to restore Americas very poor level of international competitiveness.

 

Good luck with that- no one is willing to acknowledged that the keg will run dry when the beer is still flowing.

Tax reform on property has been seen as a possible tool to rein in the business cycle for some 100 plus years.


70 trillion in real estate speculation occurred in the global real estate asset bubble.
The scope of the problem is/was far wider than the secondary derivatives market in the US and "wall street"...

 

"How can a cheap American buy a WHITE HOUSE in the 1st. World?"

You can't.

-Tom

 

A house has a reasonable built-in intrinsic value, as shelter for you and your family. The trouble starts when it becomes a gambling chip for speculators instead.

Way back when Moby Dick was a minnow and I was in the Navy, I read about a woman who bought a small cottage on Coronado Island in San Diego. It had started out as a guest house for a large home, and fronted on an alley instead of the street.

That evening at a cocktail party she met a realtor and told him, "I just bought a house today, and I'm worried about whether I overpaid."

The realtor replied, "relax. There's no way you can lose in today's market. Why, just this afternoon I heard about some damn fool who paid a fortune for a guest cottage that doesn't even face the street...."

 

Simply restore bank lending " best Practice" and you will flush out many fools. Modern ... No money down.... who needs a job.... bank lending enticed ignorant people .

 

Don't fret. After Obama's done with us we'll all be in the 3rd world.

 

You guys still have those loans in Europe? Those ended in 2008-2009 in the States.


I had always said, even during the housing boom when my wife's dad wouldn't stop bothering us about the urgent need to buy a house to earn all kinds of free money, the following:

"Real estate is priced accordingly when the average family making the average US salary (still dropping, right?) can reasonably afford to buy the average house."

That's when you know you are at the end of any bubble.

There is possibly a little over correction in some places, but like was said earlier, a house is just a place to live.

Bntii nailed it in his last paragraph as well, IMO.

 

every see "Omega Man" w/ C. Heston?

I think that is sort what Detroit is now a days.

All the "free" or nearly free housing you want, but if you come home after dark you will need to use 3 clips just to make it inside your front door.

 

They have NO LOANS in Europe at present. In the good ole days any fool could borrow 20 years, no money down.

 

The housing market will be faced with permanent decline. Its demographics. Baby boomers are turning 65. 65 year olds will sell the second house to compensate for poor pension fund performance and skyrocketing health care cost. Many Many 65 year olds coming on line in the next decade.

 

Ah, same here, Michael. Very few loans getting through ever since the "unpleasantness."



I also agree with your assessment of permanent decline (until Generation Y is ready to buy in force - there are a lot of them and they are like an echo of the baby boom). The wife and I had discussed permanent decline as well when reasoning out that buying a house was a very bad idea.

Once those baby boomers start dumping houses (especially when they can no longer live alone, etc...), the glut will be tremendous - even more so because so many of them own more than one house and control so much of the wealth.

I often wonder how that wealth will transfer. After all, they can't take it with them.

Many don't re-invest in the community/country, but at some point, they will have to spend it or give it away. My bet is that it's all going to go to health care and in home nursing type care, along with treats like vacations and things like that. So... naturally those industries will be receiving all of that personal wealth the boomers have accumulated as they spend it.

As much as many of that group despise passing wealth down through the family line, it will still be their children and grand children (as employees of the industries they will blow their money on) that will receive the wealth. It has to transfer somehow, since it's worthless when you're dead. I figure that's what will happen to transfer the wealth.

My generation (X) can benefit from their needs by setting up businesses to cater to them. My generation also benefits as we get old enough to need assisted living, since there will be a huge retiree infrastructure built out from the boomers that will be pennies on the dollar. There are very few Gen Xers in the world, so we do get that one benefit - extra retirement places - and of course, extra houses after they unload them too.

 

If you are Gen X would that make the baby boomers Gen IX? In which case shouldn't the following Gen Y be Gen XI?

It makes no sense.