This is a good article on the housing bust, and a good site to check out what has been happening in the housing market, but while the article was well written, the actual stories being told left me with several no so good thoughts, such as “stupid idiots” and “wake the hell up people, what do you really think is going to happen” kind of thoughts.
Half-a-million dollar houses are always going to be grossly overpriced (why should it take a half-a-lifetimes income to buy shelter? Who in their right mind would pay such sums?), and in an inflated market, losing your shirt on such an ‘investment’ is a likely option. Bemoaning the fact that you made a terrible decision is rather pointless too. You should be blaming yourself, not the market.
Houses or any real estate, do not always go up in value. This is a cherished belief among homeowners, developers, real estate agents and mortgage companies. There is a ceiling to the worth of anything, just because it’s real estate doesn’t mean its always going to be a good investment.
I’ve waited a long time for prices around here to fall, they never did. But I’ve seen many real estate companies and agents pack up shop and leave, since the market is locked up tight and nothing is selling. Some owners are still holding out for ridiculous prices as other owners are forced out of their homes in foreclosures.
What really gets me about the article linked above is the disconnect from reality. Many, many people are still stupidly believing that we’re going to have prosperous times again and the old economic model of constant growth and increasing investment values are always going to go up, up, up.
This isn’t even possible anymore, this past week should have made that abundantly clear. Oh yeah, it might cost $10,000 for a loaf of bread in two years, and a $99,000,000,000 for a house, due to our devalued dollars, but that doesn’t mean that the actual value of things will have increased, it only means that your purchasing power was vaporized in a flash of political stupidity.