Post real estate bubble reality.

[Yo_Mama_Been_Loggin]

This is a pretty good article that makes two good points. Number one, many homeowners unlike the big banks were not bailed out by the government when the real estate bubble burst.

Secondly it lays out a good case of what the advantage of home ownership is really all about.

There's too much in the article for me to post here so I highly recommend clicking on the link.

Why we ought to get real about home sizes

The bursting of the real estate bubble has led to a small difference in the size of Americans' homes. But there would be real gains from a much more serious shrinking.

By Doug Pibel

The real estate bubble that kicked off the 21st century taught us some things that a home isn’t. It isn’t a way to get rich quick. It isn’t a cash machine. It isn’t a speculative investment that’s guaranteed never to lose value.

This is not to make light of the pain of people who have suffered from the real-estate-fueled financial meltdown. It wasn’t the buyers who made those claims about residential real estate — it was the people who were making the loans. Say what you may about undeserving people getting loans they shouldn’t have gotten, but remember one thing: Not one of the borrowers ever approved a loan. That was done by the people who made money writing the loans.

Few of the people who bought during the bubble have gotten any help from banks or the government. Lenders and speculators, on the other hand, got billions in bailouts. CoreLogic, which provides analytical data on real estate and financing, estimates that, in the fourth quarter of 2011, the difference between the current value and the amount owed for underwater loans was $717 billion. That is hardly more than the $700 billion handed over instantly to banks and corporations in the early days of the financial meltdown — and a fraction of the trillions in loan guarantees and other assistance the big players got.

We could have reduced the principal on every underwater loan to current market value for less money than we’ve pumped into the banks and corporations that caused the problem in the first place.

http://crosscut.com/2012/06/21/lifestyle/109283/getting-real-about-home-sizes-green/

[pscot]

1. Eeeek!! Socialism!!

Recomended.

[freshwest]

2. Ye-ess, I recommend socialism.

[dkf]

3. His own thought is that people should not be in the large houses they are underwater on.

Rather they should be changed into multigenerational housing that uses much less space per person.

Renting out rooms can also help individuals afford a house that they can't cover payments for otherwise. The would decrease the square foot per occupant as he suggests.

[bluesbassman]

4. Minor quibble with the article. It wasn't the lenders making claims about the home values.

It was the Realtors and appraisers who blew hot air into the bubble. To be sure, the lenders made those loans on inflated value, which also gave credibility to the rising values, but it was a combined effort that drove it.

Other than that, it's a good read.

[Wilms]

5. I've always thought that but never heard it from anyone until now.

Realtors lined their pockets and were more than happy to see homes filipped. The more often a home sells, the more often they cash-in.