"Homes have gone from being a place to live to a disposable investment for some," said Jay Butler, director of realty studies at Arizona State University's Polytechnic campus. "It used to be that paying the mortgage was the top priority. Now, it's keeping the credit cards."Say it ain't so? People are treating homes as "disposable investment" and don't show any loyalty to the banks and their mortgage if the investment goes "upside down?" The one thing you never see in any of these tearjerking accounts of how banks are being gouged by da pipple is a realistic appraisal of home ownership and the overall home market. People don't put that high a priority on "their home?" That's because home's have been turned into a publicly traded commodity by realtors, banks, and developers who for years have touted fake, private, manufactured communities and private ameneties over public, already existing communities, neighborhoods and public ammeneties. when the government pushed the homesteading act they were at least attempting to offer the public a job (farming) along with the land. The new homeownership push, under Bush, is utterly devoid of sensible home ownership policies and was merely the equivalent of pushing "a castle for every man and every man in his castle." But every man can't afford a castle and if the castle doesn't come with its own serf crew it can't pay for itself.
Much has been written on the pitfalls of the ownership society but to my mind the fake bush push for home ownership over, say, public housing is the paradigmatic case of bad intentions producing bad outcomes. the end result of all this public guaranteeing of bad loan practices was overbuilding of spec houses and overbidding for existing housing stock. The end result ought to have been expected. People can't eat status and eventually when the three bedroom home you thought you deserved goes upside down you are going to naturally look around and figure that you'd be better off renting for a while and sticking some other sucker with the mortgage fees.
And although a lot of people were dumb enough, or gamblers enough, to pay inflated house prices in the hope that those prices would stay high as it turns out they aren't dumb enough to pay twice and three times the market rate for something that they could rent for a more reasonable rate. There is no "housing shortage" and slowly, over time, those mcmansions will be converted, perforce, into rental properties. the banks are still imagining that they can "punish" or "threaten" people into staying put and paying irrational mortages---just look at this hysterical finger wagging last line of the article I linked to:
Neighbors of the people who walk way are already being punished by lower home values due to the foreclosure.
"People should hang in there as long as they can, ask for help and try to work with their lender," said Margie O'Campo De Castillo of Arizona Dream Realty. "Foreclosures are dragging down our housing market, and unnecessary foreclosures are selfish and unfair to the homeowners struggling to pay."
Seems to me that when communities were redlined, or gentrified, we didn't hear much about the poor neighbors and their problems, did you? Does that sound like privatizing the wealth and socializing the suffering to you?
hat tip atrios for the link.