by R. Asmerom
It’s safe to say that many people have been disillusioned by the recession. The sense of job security and stability evaporated for many with the massive layoffs in the workplace and the spiraling depreciation of assets in real estate and investments. Despite the bad times, many Americans still had faith that real estate prices would bounce back up and finding a bargain of a real estate deal via foreclosure sales or otherwise would put them back on the fast track to ride the next wave. That’s very wishful thinking says The New York Times. “More than likely, that era is gone for good.”
According to analysts interviewed for the piece, Americans have largely come to understand the relationship between housing and wealthbuilding as iron clad, when that is not necessarily the case.
It’s difficult for many to disassociate one from the other since home buying has been pushed as the most responsible and reliable ways of building security since the 1960s. The George W. Bush era, with its home buying incentives, and the witnessing of everyone from real estate tycoons like Robert Kiyosaki of Rich Dad, Poor Dad fame to everyday Joes quadrupling their investment in a very short amount of time has provided some powerful imagery when it comes to real estate economics 101. But now Americans have to contend with a new school of thought.
“People shouldn’t look at a home as a way to make money because it won’t,” said Dean Baker, co-director of the Center for Economic and Policy. Maybe the outlook is not very optimistic but, of course, it can’t be all gloom and doom. There will still be bargains to be had for the astute homebuyer. As for the basic real estate investors, the takeaway is that real estate riches may not come so easily again for the lucky masses, but will be reserved for the well prepared and strategic players – as is the case in most business-related matters.