Safety in numbers
- Go up during the bubble
- Buyers got caught in the downdraft
- What happened to doubling your investment
- Cities are looking for lost revenue
- All of this will only lead to more foreclosures
Safety in numbers out weighs what used to be an investment. Remember 20 or 30 years ago when you could buy a home, or some land and it was an investment – a solid one? People even said that they’re not making any more of it and that’s why it was a good investment.
About every 10 years your home would double in price. If you kept your upkeep expenses low then you made out well if you sold in 10 years or more. Now, people who bought real estate 10 years ago saw it go up during the bubble exponentially and then crash to the ground.
Many bought at the height of the bubble and bought more than one property. In fact, it became a job to buy and flip properties because prices were accelerating so quickly. Then, these same buyers got caught in the downdraft and saw their properties drop in half or even more. This caused a panic and many repossessions and foreclosures to the point where there’s now more empty homes in the United States than homeless people.
What happened to doubling your investment over 10 years while prices gradually went up? That is gone forever. No matter what you pay for real estate now, expenses, taxes, and upkeep have gone up many times faster than in the past.
Cities are looking for lost revenue that used to come from building permits. So, they look for all kinds of ways to tax the property owner. Owning real estate has become a burden – an albatross to many people. Not only can they not keep up payments due to losing their jobs or getting their hours cut back, but now the expenses are climbing at the same time.
All of this will only lead to more foreclosures driving the real estate prices down even more. Right now entire blocks of houses sit empty with nobody interested in buying them. This does not look good for future sales or new construction. What we do see happening is more multiple families moving into a property and renting.
QUESTION: What should readers take away from this message today?
ANSWER: That real estate is no longer an investment, it’s a burden.
QUESTION: Why is this information timely?
ANSWER: This information is timely because people keep hearing that prices for properties are going up, but that doesn’t mean they’ve even returned to where they were. More and more people will soon be upside down.
QUESTION: How can readers best apply this information to their lives right now?
ANSWER: We would suggest not even considering buying any land or properties. If you do you better have a huge war chest of funds to maintain ownership.
COMMENTARY: Multiple families moving into a property that they rent is looking more like the the way people having been living in third world country’s. Americans will get squeezed even more as the economy gets worse. This group living situation may not be so bad because there is safety in numbers. Imagine living alone when people become desperate. That may not be possible even if you can afford it.