business

In U.S., booming real estate market highlights rich-poor divide

8 Comments
By Delphine TOUITOU

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I have problems with the premise of this article. Low income earners who have lost jobs or face job uncertainty should NOT be buying homes right now. That's how the global financial crisis started. As for the first-time buyers, they are overwhelmingly young. They should wait another year or so until the vaccines come out and the situation normalizes and thus their financial situation stabilizes before taking the plunge.

-2 ( +4 / -6 )

The U.S. real estate market is booming even as the coronavirus crisis intensifies, and the seemingly insatiable appetite for new and older homes has sent prices soaring -- meaning more and more families with modest incomes are seeing their dreams of owning property shattered.

"It very much is a tale of haves and have nots," said Dana Scanlon, a property agent in the Washington area.

In late stage capitalism wage labor holds little value for workers and is subject to more and more exploitation schemes so it becomes impossible to access enough capital for things like buying a home.

Rents and the financialization of capital for those who have access to it are the only options to create wealth. A rentier economy.

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Lots of research shows that when a family purchases its first home, it puts an end to inter-generational poverty because it allows the owners to build equity. This has been known for decades.

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In 50 years I have never had the desire to own property. Never owned a house. In Japan I think home ownership is about 80%. America and UK 65%.

Basically houses in Japan depreciate, and while land may keep its value, the house on it will be worth less and less as time goes on, going to zero or even minus numbers (to account for the costs of demolishing the building) after a number of decades.

One big consequence of this is that it can be very difficult to move once you have bought a house.

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Those private equity firms are great, they make loads of money. 

Don’t get confused between making money and creating wealth.

When you equate making money with creating wealth, people try and make money in the easiest way possible, which doesn’t actually create any wealth.

In 1984, for the first time in American history, “unearned” income exceeded “earned” income.

The American have lost sight of what real wealth creation is, and are just focussed on making money.

You might as well do that in the easiest way possible.

It looks like a parasitic rentier capitalism because that is what it is.

You’ve just got to sniff out the easy money.

All that hard work involved in setting up a company yourself, and building it up.

Why bother?

Asset strip firms other people have built up, that’s easy money.

The private equity firms have found an easy way to make money that doesn’t actually create any wealth.

Bankers make the most money when they are driving your economy into a financial crisis.

They will load your economy up with their debt products until you get a financial crisis.

On a BBC documentary, comparing 1929 to 2008, it said the last time US bankers made as much money as they did before 2008 was in the 1920s.

https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6

At 18 mins.

The bankers loaded the US economy up with their debt products until they got financial crises in 1929 and 2008.

As you head towards the financial crisis, the economy booms due to the money creation of bank loans.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf 

The financial crisis appears to come out of a clear blue sky when you use an economics that doesn’t consider debt, like neoclassical economics

1 ( +1 / -0 )

For more than 25 years of my rentals I never paid any cash rent. I paid in other ways. We do own my wife's family home in Nagano where we lived for 10 years. No longer liveable.

Also a condo in Florida from the death of my parents. Along with my brothers which will be sold and profits divided.

0 ( +0 / -0 )

after the prime mortgage crash in 2008, my parents lost more than 50% of their trust pension money and had to sell a lot to survive.

0 ( +0 / -0 )

In Houston you can buy two. Condo in nice areas, for 250 thousand dollars

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