March 20, 2009


Is the US obsessed with Real Estate?

Steven Malanga thinks so (via I don’t remember who):

So deep-seated is this obsession that we in the Anglosphere move seamlessly from discussing rising home prices and house flipping to conjecturing about the opportunities that waves of foreclosures will bring. Turn on your TV at 4 a.m. these days and you will find infomercials with titles like Profiting from Foreclosures have replaced infomercials with titles like How to Buy Real Estate With No Money Down.

This is nothing new. The housing downturn of the late 1980s and early 1990s, bound up as it was in the messy savings and loan crisis, nonetheless gave way to the housing boom of the late 1990s and then the housing bubble. The foreclosure crisis of the Great Depression, when at one point 1,000 homes a day were going into foreclosure, gave way to a post-War housing boom that sparked foreclosure problems by the 1950s. The frenzy that the New York Times describes seems to be in our DNA when it comes to housing.

The problem is that this obsession is not just a function of our cocktail party talk or front-page reporting. It goes right to the heart of public policy discussions in America, which is why our government often enables housing bubbles.

FYI, I have been a renter for years and it has always treated me well.

posted by Andrew Simone in culture, economics 

comments

3 Responses to “Is the US obsessed with Real Estate?”

  1. Mike Dresser on March 20th, 2009 at 5:50 pm

    I think real estate is as close to major-league leverage as the average investor can come. Even with 20% down, you’ve got a 5:1 return on your investment riding the ups and downs in the market. It is exciting: money from nowhere! Look how wise we were to buy in!

    I once played with a bit of money in stock options. I did great for a while ($400 in one day!) until a bad bet cut my original investment in half. Learned my lesson and got out; I will stick to playing the ponies or some more entertaining sort of gambling.

  2. Sheila Ryan on March 20th, 2009 at 6:13 pm

    The night J lost $1200 in one roll of the wheel in Vegas at The Venetian was bad. We’d just met a man who’d known Rainer Fassbinder, and that was pretty cool. Plus: J had been on a winning streak for years.

    Got to thinking tonight. Dang, that was sweet when we made over thirty per cent in eighteen months on that condo we’d bought in Chicago’s South Loop.

    Too bad we pissed our gains away within another eighteen months.

  3. Mike Dresser on March 20th, 2009 at 6:50 pm

    But what pissing it must have been.

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