Quote:
Originally Posted by Halfcan
This is a good example of where the country is headed. Super rich elite at the very top gobbling up every asset, 2nd tier wealthy millionaires, a shrinking middle class, and an enormous population of poor.
Real Estate is like any ecosystem- it takes all levels to stay healthy.
The poor and lower middle class have to have a way to get out of the rentals and move into starter-type homes with other first-time buyers. First-time buyer programs are amazing and essential. Lower cost FHA and VA loans as well.
These previous 1st timers need to build equity to move to the nicer neighborhoods- which then let retired folks cash out or continue to move up to gated communities.
Right now the fixer-upper/starter homes are getting bought by major investment firms and turned into expensive rentals. This will eventually put negative pressure all the way up the ladder.
The last crash happened mostly because all the First-time buyer money dried up and banks started demanding vast amounts down. It sent ripples throughout the markets. Along with high unemployment, the stock market crash wiping out retirement funds, and ridiculous hyperinflation- it was the perfect storm.
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The first crash happened because homebuyers and banks were drawing up loans neither of them could afford.
I used to consult for a very large lender. They took billions in losses because they decided it was a good idea to lend mortgages to people that had zero means to pay them off.