Well Off and Homeless - A Paradox
The Great American Dream-a home of your own. There is a strange situation nowadays. Many of the middle class are homeless. That doesn’t mean they are in the streets. They simply cannot afford a home at the prices which exist nowadays.
We are in a runaway market for real estate. Over the last few years the prices of homes have gone through the roof, particularly in the hot areas of either coast. Even between coasts there are great differences. Prices in New York City far outstrip those of Los Angeles. However San Francisco will give both a run for the money.
This is a very bad scene, particularly for the young. Definitely it is a problem for the up and coming young artists or even professionals. It is creating areas where children cannot afford to live near their parents, unless they move in. It is not good for the quality of life’s diversification whereby whole areas have become so gentrified they can be afforded only by the wealthy. Rich ghettos are appearing.
What has happened is the pursuit of a lot of money for few objects, in this case homes. No inflation nowadays - that is a joke. The dot.com bubble bursts to leave many wondering where to invest. The stock market had lost its luster. When the Federal Reserve lowered interest rates to stimulate the economy real estate mortgages became very affordable. Further the lending institutions lowered their requirements to such an extent that many could buy a home without much if anything down. The financing was cheap. Large numbers of buyers chose an adjustable rate mortgage.
Now it looks as if a bubble is appearing. Many economists are predicting it will burst. Of course they have been preaching this for months. However when the shoe shine boys start talking about their latest real estate deal one gets nervous.
Shades of the S&L crisis of a few years ago.
What is missing is the comprehension that home owning is not the same thing as playing the market. A home is a place to live, to raise a family, to be part of a community. The principle of home owning is not punting on the market. It is your most important investment financially and personally. If or when this bubble burst the cost is going to be far greater than financial.
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2 Responses to “Well Off and Homeless - A Paradox”
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Yes, horrible…either you are the very rich or the very poor.
Look at this another way: We (America) is spending money like a rich, foolish child that is yet to meet up with his or her’s accountant. Their spending has gone against the families wishes, and admonitions. Keep on Spending-We’ll get the Corporations rich in no time.
China is growing too fast. The economy (China) though booming, is bankrupting smaller countries that compete. America is still the place that has cloat, and good merchandize.
Ahh…how long this will go on is anybodies guess. Will America end up as a country that competes with China?
Remember, China does 50 year-100 year plans, we do 15-20 year, uggh plans. What are in those long term plans?
Right now China says its spending 86 or so BILLON (I believe that’s right) for its infrastructure which is cleaner air, water, communications, roads, and EVEN human right issues. WHY?
Attract, whO? American Business’.
So, back to your original post Michael. The mIddle class…will soon ’see’ more horrors as everything made in America will become made in China.
China’s 100 year plan calls for everything that they can do to build it better than anyone, any where.
Where’s America in this scenario? It’s right here-owing China more than 375 Billion and rising.
I am the poor, I am the huddle masses that yearn to be free…Won’t somebody or something help my poor and middle-class friends?
You know without them (middle-class), our America will be gone. The middle-class is the one that helps the poor, with some donations from the rich and conscious corporations.
But with greed on the rise…where does the middle-class expect the bottom to be?
America is still asleep-tossing and turning with the nightmare.
Lyle K’ang
Posted on 07-Jun-05 at 8:51 pm | Permalinkmichael,
just wanted you to know i’m a big fan of hair and your blog and couldn’t believe this story in my local alternative weekly, phoenix new times. it’s about willie windsor, who played claude in the final broadway cast. you’ll have to read it to believe it!
here’s the link:
Posted on 08-Jun-05 at 7:10 pm | Permalinkhttp://www.phoenixnewtimes.com/Issues/2005-06-09/news/feature.html