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Friday, April 28, 2006 |
The May issue of Harper's carries an illustrated guide to the coming real estate collapse: The New Road to Serfdom.
"Never before have so many Americans gone so deeply into debt so willingly. Housing prices have swollen to the point that we've taken to calling a mortgage - an 'investment'.
The reality is that, although home ownership may be a wise choice for many people, this particular real estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests.
The bubble will burst, and when it does, the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom."
In the controlled economy of the Netherlands where a housing shortage is carefully maintained to boost prices (there is no shortage of business property), many people have chosen to pay off their mortgage at the end of the period with the proceeds of stocks they leased. They have a double risk; the market value of houses can go down and the stock prices can sink. In 20 years the market value of houses in my neighbourhood has risen 400%. Local authorities have an interest in pumping up house prices which would give them a larger income from property taxes.
In England even the BBC is making an effort to boost property prices with programmes like Escape to the Country and many others.
Infoshop: "Lenders began foreclosing on 323,102 mortgages, a ratio of one in 358 U.S. households, according to a report issued Monday by RealtyTrac Inc. Banks typically start foreclosing on mortgages after payments are 90 days late."
11:24:56 AM 
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