In the next decade kids will want their parents to help them pay for college. That was often done by home equity loans. But with underwater homes and skyrocketing tuition it looks like the average joe the plumbers son will not be going to college but will be learning how to snake a toilet instead. Herein lies a huge problem. The days of everyone getting some college educations are over. Just when we need to to be competitive. Realty Trac has statistics that show that we are worse off than the depression already. (homes have dropped more in value but 33% unemployment without unemployment insurance is a lot different than 9.2% unemployment. Besides we have FDIC insurance as well)But when you are talking housing...it is bad. The depression was relatively saved by war production while we are not likely to enter into any war soon. So we have that going for us. The other problem is that we have about a million new homes ready to go into foreclosure not yet on the books. The average American will likely not think of a home as an investment anymore. The average Gen Y kid certainly will not after watching his parents home lose value for 15 years. The economy needs homes to be purchased to help build and grow the economy and it is now more likely that the housing market will decline rather than grow for the next decade or more. Is that sky is falling talk? I am a glass is half full guy I have to tell you but every indication is that people will start renting and leasing and few people will be able to purchase homes. When I hear the talking heads (MSNBC yesterday) say that housing needs to return to normal to spur the economy my blood runs cold. As a broker on the street I have to tell you. We don't think it's coming back.
At RED Diamond Realty we have homes for rent and lease to own properties and we are very busy. We don't work with buyers that are less than six figure incomes usually so these are top professionals who cannot get loans not just laid off factory workers.
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