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While the video is an amusing parody, the subject matter is EXTREMELY serious. People have asked me what my take on the housing crisis is, and like all things on this planet, this is one of those issues that is inter-connected with lots of other issues. It can get complicated easily, and if you listen to all of the pundits out there, especially Realtors, HGTV shows and stock-market talking-heads, you’ll be so confused that you won’t know where to turn.
Here’s The Problem
In a nutshell, the problem is simply one of supply and demand. When there is a lot of something available, and/or not many people want it, the price of it is very low. When there is little of something availabel, and/or lots of people want it, the price is very high.
Housing In The U.S.
Currently in the United States, there are a little over 100,000,000 (one hundred million) households. That is, there are approximately 100 million houses (or apartments, condos, town-houses etc.).
Here’s the problem; there are 20,000,000 houses that are unoccupied! That is, nearly 20% of all available housing is empty. Put another way, there is 20% more housing available than demand. What do you think THAT does to house prices? Yep, house prices go down.
Complications
Now there are plenty of other things that come into this, but I don’t want to discuss these because they only confuse what is basically a very simple equation.
You may wonder, in that case, why there is an increasing number of homeless people. That’s easy to answer; just because homes are available doesn’t mean that people can afford to buy or rent them, let alone pay for water, sewage, heating, cooling etc.
Jobs
Until there are plenty of jobs available, ones that pay enough money for people to afford these homes, house prices will continue to tumble………….well, FREE-FALL is a more accurate description I think. The so called “jobless recovery” is nothing more than an oxymoron, and abundant jobs will NOT be available while manufacturing is done in other countries.
It’s THAT simple.
The Big Question
Now the question should be asked “who will make the U.S. an affordable place for business owners to run their factories?”. Off hand, I can’t think of anybody who has the intestinal fortitude to make this happen, because it would mean all kinds of changes to tax laws.
The U.S. is a country of over 300 million people, most of whom are happy to work for a living. It can be a great country again. I hope it’s allowed to be all that it CAN be once more.
Luke.
If this helped you, please feel free to buy me a cup of coffee.......leaded of course!!!
