I knew it has been coming for months now, maybe half a year (since I became a Marxist in December). In some states there are now 4 houses for every one buyer. Houses everywhere are or soon will be decreasing in value. They are already declining in areas where other houses are still being built. I know this recession is starting now because I read it in the conservative biased Albuquerque Journal, even though they make stuff up because they are racist elitist assholes. The class contradictions under the current system are ridiculous. We have surplus houses, yet we have people living on the streets. We export giant amounts of food to other countries, yet some people can't get enough to eat. This is bullshit.
the current tax code in the US has favored lots of big houses by granting federal tax exepmtion for r.e. tax and mortgage interest. Personally, I am in favor of capping these deductions. Hopefully this will encourage builders to build more modest homes. The value of a Home / house can be thought of like a layer cake. the bottom or basic layer is the amenity of the house as shelter. the second layer is the value as investment, this entails all of the tax deductions as above and also for improvment and appreciation. the top layer is a margin of speculative value, this top layer is the most variable and it is this layer which is being depressed at the curent time.
things ought to be built where it makes sense to build them and not where it doesn't. private ownership of land almost completely insures the exact opposite. the land is sacred. all land. moraly and ligitimately it still belongs to the indiginous cultures it was stolen from. i don't believe procustian solutions are the best and only answer, they have problems too, big problems, but i will certainly aggree that making everything have to begin and end with little green pieces of papar isn't one either. =^^= .../\...
the ownership of land also implies citizenship. without land you are a serf. you have no control of your life, you can't reside anywhere without paying, someone else has control of your life. you can't reside anywhere without permission. the great thing about throwing people out on their ear is that you can coerce them into the military because they have no where else to go. if you want some soldiers just put the interest rate on loans - up.
The problem is that real estate prices are not based on anything. In most forms of trade the price of the item being is based on its productivity value, that is, its ability to produce smthing for society. However, with real estate, the prices are just pie in the sky numbers with no basis on actual value. That is to say the real estate industry is based on nothing but pure fanatsy. For example: A guy buys a 200 acre farm for $200,000 and decides to sub-divide it into housing plots (a crime in itself if you ask me, but anyway, moving on-). He then prices 1 acre lots at $10,000. Where did the $10,000 figure come from? It's not based on any kind of value, the developer only paid $1,000 per acre for the land. So if you were one of the buyers, the price you pay is not based on anything other than one guy trying to multiply his money ten fold. And that's really the problem with the real estate market, this kind of pie in the sky growth cannot be sustained forever, so at some point, the market has to recede. Capitalists cringe at the thought of a real estate recession because they have built their fortunes on the kind of economics I just described. Personally, I hope the bottom completely falls out of the real estate market, to the point where the capitalists couldn't give away their land if they tried. They deserve no less for what they have done to the poor in the name of increasing property value.
Anybody who owns a home cringes at the thought that prices are dropping and in the US, most of the people own thier own homes. Prices do fluxuiate. But If you dont need to sell, you will be OK. Real Estate values are established in a market of bidders, who are backed by mortgage finance companies. Right now we have have less bidders than there are homes for sale so prices have dropped. If finance companies tighten up thier standards there will be less qualified bids chasing after those homes on the market. It seems unconfortable if The Federal Goverment is doing adventurous lending to semi-qualified people. Building a portfolio of dubious quality mortgage investments, all financed by joe taxpayer. Massive defaults are then everybodys problem. Better hope prices don't drop too much. :&
I don't care how much they drop. Like I said in my last post, the developers, politicians, and tycoons have steamrolled the poor in the name of building up their property value. To make things worse, When they sell thier real estate at thier wrongfully inflated prices, they don't give anything back to the communities they have ruined, or to the individuals they destroyed. It's a pirate mentality. Don't work for a living, just steal what you want from the guy down the street. These people deserve to loose every penny of their ill-gotten gains. (This is why I hate capitalism, by the way.)
Many of "The Poor" are employed in the Real Estate industry, Title Clerks, Mortgage Processors. Property Inspectors, R.E. Appraisers, Well Water Testers, Termite Inspectors. Title Searchers, Loan Closing Clerks, Underwtiters. Wholesale Mortgage Reps. Loan Officers. County Clerks. Legal Secretaries. Messengers. Real Estate Agents and Secretaries. Septic Inspectors. Insurance Agents. These are jobs that cant be sent overseas. Those " Tycoons" have to pay for it all. Its Expensive. If anybody is to blame for helping to inflate property values, its our beloved Goverment Sponsored Enterprises: FHLMC, FNMA, HUD/ FHA who continue to underwrite loans on the tax-payers behalf. Guess if you dont pay any taxes its not a concern. As far as giving back: Real Estate Taxes and property transfer taxes and mortgage recording taxes are Huge. in NYC the Mtg Recording Tax rate is 2% or $6,000.00 for a $300,000 mortgage. As far as ruined communities, I see homes being rehabilated all over. The Real Estate boom was a fix-up boom. Everybody made out, but its over. Our Politicos dont have the stones to eliminate the deduction for R.E. Taxes on IRS Tax Returns. Even the Alt Min Tax is under assault. When your guys vote to boost our income tax rate you can be sure that your "Tycoon" will still enjoy the deductability of his $12,000.00 a year property tax bill. and Jerks like you and I will be paying a higher income tax on our shitty take-home. Fairness my Ass.
The tycoons pay for very little when they decide to steal whatever they want from the guy down the street. Ever heard of eminent domain or beautify America? The kinds of 'poor' you are describing are the ones who actually have jobs. I'm talking about the penniless dirt farmer who desparately tries to scrape a living from the earth while fighting the developer hell-bent on destroying every tree, meadow, and field in the name of development. You couldn't possibly imagine how agressive and how evil these people really are unless you've actually been in the fight. And it's just an evil based on greed. Hate based on making more money at the expense of the common man. I've been there. Alot of other people have as well. You're right about the goverment agencies. they do alot to overinflate property values.
In the Detroit Michigan area one out of each 88 homes in in forclosure. The highest rate in The U.S. Miami- Ft. Lauderdale is second.
