By Kevin Chiu
Sometimes it’s hard to fathom. But there isn’t going to be a full-fledged recovery from this real estate crash for many years to come. For some reason a lot of people want to believe that things will somehow mercifully get better—and get better fast – like over night.
Some areas of the country are more fortunate than others. West Virginia has seen hard times for years and they’re seeing home prices rise. Kansas and Iowa are enjoying a boom in farming that is bringing record prices for their crops. At least some real estate markets in 15 states are forecast to improve in 2012.
But the real estate crash that the majority of the U.S. is dealing with involves more homeowners, unemployed, underemployed and underwater mortgage holders than any other crash in U.S. history. At the current average rate of deflation by the end of 2012 one in three mortgage holders will be underwater.
It’s also the reason why another 2-million to 3-million homeowners will give up on their homes in 2011 through 2013 walking away from their mortgages. The defaults should come as no surprise to anyone who has been watching things change in America. Generation X feels society owes them something. It’s this sense of entitlement that has come from their parents raising them to feel better about themselves.
But this same sense of false entitlement has helped to destroy common values that were an essential part of being an American. It was an unspoken bond between citizens that at the core of our democracy America cared more about “country” and others than ourselves.
The merciless banks, including failed Countrywide, Bank of America, JP Morgan Chase, Wells Fargo, CitiGroup and their like broke this bond with Americans when they granted anyone a mortgage to buy a home.
Americans also broke this accord with ourselves when we somehow started thinking and making ourselves the “center of the universe.” To even think that one person or family is more important or deserves more just because they were born in the U.S.A. was ludicrous. But those who grow up with the silver spoon in their mouths or who inherit it are most often the type of people who are the self-centered careless types that offend our nation’s forefathers.
The era of the selfish, arrogant and self-important is a hard pill for most Americans to swallow and many of them are not even part of the 1% that Occupy protestors rave about. They simply don’t possess enough cash. Their wealth often comes in the form of stock, bonds and other investments, which can disappear in a bad financial market quickly.
Many are wanta-bees whose whole drive in life is to ascend to the top of their entitlement.
A U.S. Census report issued just days ago made a major issue clear – half of all Americans now either live in poverty or are part of the living poor. With wages falling for years it was too obvious for many years, and with pay-rolls down, and unemployment at the highest level for the longest it has been in U.S. history, who is going to be there to buy homes in greater numbers?
At least Cleveland has it right. They’re bulldozing 20,000 homes in the next two years. That’s a good start.