Debtors attempting to avoid bankruptcy by waiting for housing prices (and equity) to increase may be waiting a long time. In fact, according to The New York Times, wealth-building via housing booms may have also gone the way of guaranteed pensions, free healthcare, and secure employment.
Per the NYT, “many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg. The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming. More than likely, that era is gone for good.”
This rather bearish news on the state (and future) of the housing market is capped by the finding from Dean Baker, co-director of the Center for Economic and Policy Research, who "estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up."
Unfortunately, many Americans aren’t buying this news on the housing bomb. “In an annual survey conducted by the economists Robert J. Shiller and Karl E. Case, hundreds of new owners in four communities -- Alameda County near San Francisco, Boston, Orange County south of Los Angeles, and Milwaukee -- once again said they believed prices would rise about 10 percent a year for the next decade.”
In truth, the housing-as-investment ideal that arose post World War II hasn’t been on solid ground for decades--when inflation of the 1970s and favorable tax policies increased housing prices followed by a long decline in mortgage rates in the early 1980s. In the next decade, rates rose, allowing American homeowners to withdraw about $100 billion in home equity houses. These billions paid for a lot of luxury—luxuries that we’re now paying for, in spades, since the inflated home prices burst the housing bubble in the 2000s.
“The experience we had from the late 1970s to the late 1990s was an aberration,” said Barry Ritholtz of the equity research firm Fusion IQ. “People shouldn’t be holding their breath waiting for it to happen again.”
With substantial sums of money available from home equity in the 1990s now a distant memory, many homeowners in the new foreclosure-plagued, underwater American reality are fortunate to still be solvent. For others, the tumble in housing prices has taken it’s toll, leaving many wondering where to turn no that their own personal “home sweet homes” are leaving a sour taste in their moths.
Don’t wait for your own personal housing bubble to burst. Join the millions of American homeowners who have found immediate help to keep their hard-hit homes. If you have been hit hard by the lingering housing crisis, knowing a qualified bankruptcy attorney can help you to conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond our own “Great Recession.” The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.