The fall is already upon us, we are just to blind to see the signs.
2008 marked a massive change in the real estate landscape. Massive crashes on multiple sectors ran banks into the ground. The reasoning? Over lending to those who couldn’t pay and greed from the banking sector hell bent on making more money. While mortgages got bundled together and sold on a secondary market families lost homes. We fixed it right? We are now safe because the government helped us. Wrong. Instead the feds bailed out their wall street buddies, they created an organization that would fine institutions miniscule amounts for bad lending practices, and they lumped it back on the consumer to be educated on the process. They did this all while continuing to increase the housing market as investment opportunities for anyone with enough cash to do so.
The increase in housing prices has now reached a point that the average person of middle class wealth needs government assistance to afford a home. What happens when the average normal home owner can no longer afford the increased tax rate or mortgage costs? What happens when the older generations pass away and give their homes to their children? Can they fit the bill on something they financially can’t afford. Compensation for US workers has increased by 10% since 1980 while house prices have increased by 310%, let’s adjust for inflation on houses and we still see 24.6%. Far from the average worker’s wage. We are destroying our financial system. Making our money weak, our prices high, and our generational wealth nonexistent. When the housing market crashes people will be in shock. They will wonder how it got so bad. They will wonder who was responsible. While we did nothing for years. If we never learn from our mistakes, we will forever repeat them.
Housed and Fed 