The Peak Report
Real Estate Blog for the “High Country”
“ The truth is like poetry. Very few people like %*#@^*# poetry.”
( A quote from the movie, “The Big Short”. )
This is my favorite line from one of my all-time favorite movies “The Big Short”. If you want a clearer understanding of what went wrong in the housing market eight years ago, this is a movie you must see. The truth that no one wanted to see is the following. # 1. Not everyone can afford a house. And # 2, Not everyone can afford a house. And let me add a third, Not everyone can afford a house. But the notion that home ownership was not just a privilege, but an amendment to the constitution was pushed by big banks, Wall Street and yes the United States government. I can tell you from reading the constitution, home ownership is never guaranteed.
The movie points out just how enormous the after effects of the housing crash have been. A near catastrophic failure of our banking institutions, a unilateral vote of no confidence by the American public, and a massive number of investors who are still reeling from the loss of not only equity, but also liquidity. Housing, once held like gold has become a burden to portfolios for the wealthy and a death knell for those buried in sub-prime adjustable mortgages that were dangled like carrots. When did becoming rich on the backs of so many hardworking Americans become so blasé? It’s a question that is answered in spades during this film. It may take a second viewing to really understand the nuances that are revealed in this quasi documentary, but once truly understood, you’ll walk away thinking to yourself “How did we let that happen?” and “Never again.”
And yet buried in the back of so many home owners psyches is a dollar figure of what their house was worth during the height of the frenetic housing boom. It’s a very tough notion to let go of easily. If I had only sold or I had only, not bought, my life would be different. Maybe, but the reality of the situation supersedes those, “ifs” and “buts”. Those who sold for huge gains during that halcyon period were the winners. From that moment on there were no more gold medal investments to be liquidated, only runner up trophies that became less and less impressive over the ensuing years until we began our bump along the bottom. Those who are buying now are getting some great values. Timing is everything. I was affected and almost everyone I know was affected in some way. Some were effected more than others. And when the smoke began to clear, the banks were bailed out, the auto industry was bailed out and Wall Street people who should be serving jail time were given a slap on the wrist, fined 10% of their enormous wealth and told not to do it again. And we the people were told to keep moving and that there was nothing to see, as if the huge train wreck never happened.
Owning a house was, and is again becoming, the end result of hard work and prudent savings. It is an earned opportunity with a dash of hope thrown in. The hope that you will be able to make that mortgage payment for the next 15 to 30 years. It is the hope that our economy will weather the storms, remain solid, and continue to be the vehicle on which our future dreams ride. But there is no guarantee that along the way it will make you rich, it may, but there is no assurance. But just having an opportunity kind of makes it all worthwhile. And hopefully, when it’s all over, you’ll own something that is worth more than when you started.
Before I go on, I want everyone to know that I am confident the market will return. I make my living and support my family selling real estate. I am bullish on real estate here in the High Country. The dream of owning a home in our community has never been stronger, albeit the ability to do so has become suspect for some. Will it return to the high water mark of early 2007, probably not anytime soon? However we push on, with the understanding that home ownership in this country is still one of the greatest sought after dreams.