Neural Gourmet Archives | Feed Your Brain
Neural Gourmet Archives | Feed Your BrainAs you're all probably aware, the latest economic doom meme that's been all over the news lately is that the housing bubble has burst. While many experts disagree* that the housing bubble has burst, and some say that it will only result in years of stagnation in the housing market, the general concensus seems to be that the boom times for real estate are over. Now, I've never been good at economics, but I've got to wonder about something.
Everything I've seen about the possibility of the housing bubble bursting has focused on what a tragic thing this is for homeowners. How they'll be stuck with these houses they won't be able to sell or how they'll have lost all that equity. OK, I feel for the average home owner who's invested their life savings in a home only to have their equity wiped out. Really I do. I'm not that stupid or callous. I can even extend sympathy to all the oblivious drones who bought overpriced McMansions who are now a few years out and their crappily constructed homes are starting to fall apart already. They'll have no equity to borrow upon to bring their homes back up to snuff.
Yet, I have to wonder... Is this not a good thing? Is it not good for an over-valued market to adjust back to somewhere near normalcy? Actually, I'm thinking somewhat closer to home (if you'll forgive the pun). Won't this mean that many people who were priced out of the inflated housing market, thus creating a housing shortage, actually be able to afford a home now?
I don't know. Like I said, I don't really grok economics. So much of it seems like, well, voodoo economics to me. What I do know as I drive around the downtowns and neighborhoods of the decaying upstate NY cities I see all kinds of houses standing empty and literally falling in where they stand. And even though these properties are already priced at bargain basement levels, the people who should be able to afford these fixer uppers, new families and young single professionals, can't. So they become abandoned, the city takes them over and bulldozes them. Meanwhile the big boxes bloom in the suburbs.
It seems to me that if the banks really wanted to make some money they would take a cue from the credit card industry and start lending cash left and right to previously undesirable borrowers to buy and renovate these inner city properties. This would have the added benefit of revitalizing decaying former industrial cities. And it seems to me that falling home prices would make this all the more attractive. But, I suppose this would actually require some kind of government guarantee against the money similar to the student load program and we're unlikely to see this any time soon.
But I don't get economics. What do you think? Could a burst housing bubble really be a boon?
*Note: This link is to the Free Market Project website which is a division of the Media Research Council, a far right organization headed up by fundie nutcase L. Brent Bozell who is perhaps best known for his Parents Television Council. You may remember the PTC for filing 99.9% of complaints to the FCC about indenceny on television. L. Brent Bozell is one of the people primarily responsible for the myth of the liberal media.
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I Rent. When all these stupid people wake up one morning and realize they owe Ditech-Dot-Com half a million bucks secured with a shack that MIGHT go for 20 kilobux, I'm not going to feel the least bit sorry for them... I tried the "Murkan Dream" 10 years ago and it turned into a damn nightmare. I got sold a load of bullshit and wound up more top-heavy than a Sumatran ferry boat with a house that worth realistically about HALF of what it was appraised for when I got the loan to buy it. After 2 years of trying to sell it, first for almost 150 kilobucks (that guy was blowing a lot of smoke up my ass), then finally dropping the price to 69,000 just to get out from under it, I lost the damn place. Went tits-up and chapter 7. Oh, well, live and learn. At least I've stopped throwing things at the radio when a Fannie Mae spot comes on...
All the schemes the lending industry has come up with in the past 10 years, ARM, "Interest Only" loans, etc, it's worse than a dope pusher giving you your first few scores for free.
People with realistic expectations and a tradtional POV towards home ownership, like my ESSO who now owns her crib free and clear may come out of the impending bust OK. They haven't over-extended themselves. These fools who look at their house like it was a never-ending money tree are gonna be bit and bit hard.
And I don't have the LEAST bit of sympathy for their coniving Yuppie asses.
Round and Round it Goes...
First off; I wish Wheelman would stop holding back, and really let us know how he feels 
I've never owned a house, in part because of job instability, but mostly because of this very thing. Is now a good time to buy? Should I wait? What if I get ripped off? Ask enough questions and you find yourself paralyzed.
I'm sure it isn't that complicated, but when the time finally comes to buy a house, I don't think I'll pay much attention to market trends. Is the rate good? Can I afford it? Do I have a hot next-door neighbor who likes to wash her car topless? Those are the only questions I'll worry about.
Especially that last question.
I had a girl across the street who liked to wash her Triumph TR ever saturday in a little black bikini... MWORRR!
No, she liked guys with tattoos and UAW paychecks...
One a these days, I won't be able to hold it back. Probably win "Blog Rant of the Year" for TNG or get us all sent to Abu Graihab...
Round and Round it Goes...
