Buyer Beware of This Housing Market

Was I assigned by the cosmos to be the harbinger of bad news? Sometimes, I wonder. I’ve long had a rather unfashionable approach to finances, but I’ve been suspicious of our booming housing market from the beginning. Oh, well, here goes …

An experienced underwriter friend in Florida tells me it’s hard to find a bank or mortgage institution that isn’t pushing her to approve as many mortgage loans as possible in the quickest timeframe as possible.

She says that in her 30 years of experience, she’s never seen anything like the current housing market. She also says it’s almost impossible to find a bank that isn’t trying to push through mortgages at warp speed. Are they all frantically raking in the dough before the bubble bursts? You know, making money while the sunshines.

Of course, this is Florida, a sunny state for shady people, but my psychic card readings are predicting grave outcomes — AGAIN.

Here’s one scenario — over-priced properties sold to people who can’t afford the payments over the years but when the bubble bursts will be sitting in a house that is worth less than their buying price.

Sound familiar?

They’ll tell you that if the bubble bursts, it’ll be for different reasons than in 2008. So what? Is that supposed to make us feel better? Economists will also tell you that it’s unlikely that the bubble will burst. Really? Didn’t they say the same thing leading up to 2008?

I’ve lived long enough to recognize a trend.

We’re a nation of debtors who chase after the American Dream like we’re living in Sodom and Gomorrah. You know that old city of the Bible where in spite of the warnings people partied like there was no tomorrow. Guess what? For them, there was no tomorrow. The shit hit the fan and their partying days were over. When people from all socio economic brackets are living paycheck to paycheck, the Dream is actually the American Nightmare.

Wait a minute! Aren’t we experiencing a pandemic?

Yes, we are and that should make one even more careful not less, but if truth be told, we were teetering on the edge of the ledge at the end of 2019. Yes, the pandemic pushed many Americans off the ledge, but personal debt, corporate debt and federal was already at an all-time high.

In spite of a world pandemic, the housing market soared.

A buying frenzy took place that involved people spending money they didn’t have and jumping out of the frying pan into the fire. Sorry but not sorry for using that old cliche. Americans are incapable of exercising caution when it comes to taking out loans for things they can’t afford at prices that dig them deeper into debt.

But wait! Who’re the winners?

I’ll give you two guesses even though by now you should be able to select the right answer by checking the little box by the word bankstahs. If you’re still struggling to figure out what’s going on, maybe you deserve to live out your life as an indentured servant.

That’s ok.

Markets crash, bubbles burst, pandemics occur, recessions and depressions happen on a predictable cycle. Most Americans prefer to ride the wave and then cry when they find themselves in the hole again. We don’t seem to learn that our markets are crooked and designed to benefit the wealthy.