The Housing Bubble and Homeownership for the Wrong Reasons

In fact, they were a bubble created by the bankers and the government that was tied to POP! In the 1930s, during the depression, a guy from Arkansas bought a bunch of real estate for 10 cents on the dollar.

Farmers were experiencing two types of financial challenges, one the Great Depression created by Wall Street and the Stock Market Crash of 1929, and the other the Dust Bowl, where drought and wind ended many people’s farming dreams. and their families.

The guy from Arkansas got the property, as did his heirs. One of his heirs occasionally sold properties when he needed the money. But development was limited by the fact that there was not much land available in the area.

In the early 1990s, the family still did not give up much land. But 60 years had passed 3 generations. It’s a long time to wait for the reward.

From the late 1960s through the 1980s, real estate prices in the South and upper Midwest stagnated, if not decreased. The large surge that occurred in California skipped these regions, mainly due to the offshoring of manufacturing jobs and population declines in cities where factories closed one after another.

And then the government decided to bring home ownership to the masses. Everything was fine as long as people had jobs. There were a few foreclosures, but many successes made home ownership look great. It looked so good that people got a false sense of security and started fixing up houses and tearing them down.

In fact, home values ​​generally don’t go up enough to move. You might be able to invest in an unattractive house in a great neighborhood and make money, but it would never pay off in a more marginal neighborhood.

And that’s where we are now.

Most houses take longer to resell.

They are not worth that much money. They are returning to more realistic values.

They may not be worth remodeling unless you’re doing it for your own pleasure. And that’s healthier in many ways. People may begin to think more about home and family and less about “investing” in what home should be… a place where you live with your loved ones. It is a place where one lives a life.

Houses only generate income when you sell them.

A good investment generates income every day just like a good business does.

Teach your kids to be entrepreneurs, not big mortgage owners.