Where Did The Money Go?
December 5th, 2008 . by Knox BardeenI get this question quite a bit, or at least some variation of “Where did the money go when the housing bubble popped?”. In the car this morning I heard an NPR piece that related quite well to the question at hand. I wish I could embed the audio here, but a link is going to have to suffice.
Where Did The Money In The Housing Market Go?
One of the opinions in this piece is that if the rise and fall of house valuationswere theonly thing going on over the past few years, everything would still be ok. It’s when homeowners started treating their homes as personal banks that the real estate world became dicey.
The money actural is gone, it shrinks as the prices go down. The institutions who were to get it back are taking shorts sales. It is a basic destruction of capital.
I come into contact with people like this everyday. The bank are really at fault for giving so much money to people that were already in debt over their heads..
Knox, I hope all is well! Anything new going on in Smyrna? How is the market this Spring? BTW…Love the design of this site. Very clean and easy to navigate. Thanks for keeping up abreast of everything Smyrna! Have a great day.
Ian
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That’s a question I always had on the back of my mind. I just think that its considered invisible money, its never really there, we put our own price on real estate.