Let ‘Em Fall
Perhaps it’s sick of me, but as a twenty-something I’m going to say it: let home prices fall. Plunge. I bring this up in light of Mary’s last post where she outlines one argument along the same vein.
In the last few years, home prices have seriously out-paced the rise in wages. This problem, coupled with my generation’s serious debt load — student loans, car payments, credit cards (I’m not asking you to feel sorry for anyone, I’m just laying out the facts) and even medical debt — the thought of stashing away enough money to eventual come up with a down payment seems daunting, if not completely impossible.
That’s not to say I think we should leave everyone who was swept up in the subprime crisis high and dry. I see the appeal of being told that I can in fact own a home — even if I have no money for a down-payment. From what I gather, there was some serious mis-representing on the side of lenders, and real confusion on the side of borrowers. Certain racial groups were targeted for the worst loans, while immigrant buyers were prey for members of their own communities. It’s an ugly mess.
So while I think it’s a good idea to sort out these problems to make sure they don’t happen again and perhaps even “bail out” people who are facing foreclosure, I still say let home prices drop. For all the homeowners out there who say their future depends on home values rising forever, think about all the people behind you who are being left completely out of the game. There’s got to be a better balance here between how much people actually earn and what a place to live costs.
Seeing that this all straight from an angry, self-important, high-self esteem generation X or Y place that I picked up while volunteering as a kid on my way to soccer practice, maybe I could be totally wrong. So Mary, as someone who actually understands all this, if home prices fall, will it actually mean a brighter future for people like me?