A Bleak Future

The house across the street from my house that was foreclosed on had a first and second mortgage of over $400,000 on it. It is now for sale for $229,000 by the bank. It looks like the holder of the 2nd mortgage took a direct hit on that loan. The bank that held the 1st mortgage also is taking a cleaning on their loan.

I never thought of my home as an investment but more as nothing more than housing that was being subsidized by the tax deductions the IRS allowed me to take for the interest I was paying on the loan on it. I paid $38,000 for my home when I bought it over 30 years ago and the loan on it has been completely paid off. My house turns out to be the best investment I ever made in my life compared to all my other investments and it still continues to be the best investment I've ever made.

When the US digs out of the economic mess it created for itself, the economy of the US just might not look like it did before our economic crash. I suspect that the economy of the US will resemble more the economies of Europe. There is a very good chance that homeownership for most Americans will become an untenable goal just like it is for most Europeans. Homeownership will become an advantage of a new privileged class made up of us old geezers who bought our homes when they were affordable and held on to them through good and bad times. Everyone else will be tenants like most Europeans are.

We are going to be living in very trying and "interesting" times for the rest of the time I have left to live. I hope things will be better for our grandchildren.

Fred