Home Prices

I’ve said it before and I will say it yet again – We are seeking the new normal, not the return of the old normal. The old is gone forever; look for the new and make it happen as best we can and build upon it for the long term future.

Why am I saying this? Because I just read that housing prices have risen yet again and are nearly at an historic high.

And I say this is not true. Home prices depend solely on location. If the supply is low relative to demand prices will respond with a rise as well. New York metro area is an example. So too Washington DC. In fact, DC’s pricing rarely goes down because federal government as an industry is a growth industry, especially at its headquarters region. This is not true away from headquarters. A lot of chiefs and not enough Indians in DC; we all know this. But head bangers are what make the federal government go around so they move to DC, buy homes, create jobs, and that requires more homes. Prices thus rise.

Chicago is another story. Lots of changes going on in Chicago. Some areas are booming with an influx of new residents; if space is already tight with neighborhoods built out, then remodeling or tear-down-replace are the only options. Both are costly and prices rise. There are plenty of neighborhoods throughout Chicago and all of the suburbs where prices are still doing down or are so low they can’t go lower. The old normal is long gone and the new normal hasn’t visited these areas yet.

And the same is true all over the country following the exact same principles laid out above. Period.

Now re-read the reports on rising home prices. They are bunk. They are a scam designed to line the pockets of mortgage lenders and real estate people who are gaming gullible populations. Too bad; you would think these same people would understand exactly how we got into a nation and international mess because of the greed of mortgage lenders and mortgage bankers, and investment banks and real estate professionals. They were there when it happened. They were there trying to game the system for all the money they could.

The result was the second largest economic crash in the history of the USA. Only the great depression was larger. And for a time there it looked like we were in for a repeat of that. Only huge flexibility, suspension of legal penalties and a lot of compromise allowed the federal authorities to bail out the sick industries who caused this mess. We are past that now. But you would think we are entering a new bubble.

So they wish. Shame on them.

Condos and townhouses are still depressed. My old townhouse once was valued at nearly $280k; it was valued at $132k at the time of my bankruptcy. And the bank lost the capital they helped build out of nothing; so they reaped what they sowed. I paid all of my other bills and reaffirmed my auto loan. So no one else lost money from my BK.

I did not game the system. They gamed me.

I’m not happy about this but I am over it. I am happier with less and living a much better life than I was before. We don’t travel and we worry about bills and auto care and medical issues, but otherwise we are fine. 

Too bad the bulk of our population doesn’t understand this and learn to live with it. They would be so much happier. There would be much less drug and alcohol addiction, too.

Isn’t it time we called out the greedy people among us and asked them for an adjustment?

Meanwhile, let the rest of us read the tea leaves accurately and get down to what is really important. And that starts with other people, not the self. It takes valuing the simple and the everyday components of life, too.

Not a bad lesson to learn. It makes everything else so much more pleasant. And rewarding!

August 1, 2016