Owenership Spin
A sure sign that the real estate bubble in North America is about to burst is the number of puff pieces the compliant New York Times publishes for the real estate industry. The latest uses a ’study’ from a ‘research’ company that’s really just a credit company trying to drum up business, the article reads like a glowing time share ad.
Over and over again they say it’s easier to buy a home than it was a generation ago, except they don’t go back a generation, but to 1980 when the numbers make it look good for their article. Forget about them mentioning that at one time in North America one man could work 8 hours a day and pay for a mortgage on a home, and that now it takes a couple, two people working, to own a home. They do a good spin on: “in the past, a home buyer often needed to make a down payment equal to 20 percent of a house’s value to get a mortgage; today, little or no down payment is common.” without mentioning that almost no one makes enough money to come up with 20% of a small fortune. A couple paragraphs late a couple is taking out two mortgages, just so they could afford the down payment.
Further, they talk about Portland, and how an apartment, not a home, sold for 81k in 1990, and 169k at this point in time. But not to worry, according to the article, incomes have risen over 50% in Portland to match the doubling of the price. Hmm, I was making $12/hour just out of high school in the 70’s, and now get $13 forty years later - wonder how they do it in Portland? Amazing what kind of spin you can get out of numbers, one fellow thought he was getting a deal by paying double what he would have a decade ago, and fifteen or twenty times what he would have paid fifty years ago. Not until the second to the last paragraph of a two page article is it mentioned that a couple today would end up paying half their income for a home instead of a third, as recently as 1985.