| Did You ATM Your House? |
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Lots of people are asking how we got here. Here IS: Home prices worth less than they were 2 years ago. The common thought is that housing prices will “always go up.” While today many will say ‘bahumbug’ to this, it is actually true that over the past 2 decades, home prices nationally have increased over 240%… does that mean that every year every market goes up? The answer to that is: NOPE. Real Estate has always been, and will always be a “local market.” The ATM reference here is how we got here. Did you do a refi of your house over the past 5 years? Many people did. Many people used the “up market” to get cash out to pay their other obligations down… and then found themselves charging those cards and credit lines back up… that’s how we got here… many people borrowed more than was sensible, just because they could… and they sucked up all the equity in their house’s value… The banks loaned it to you, without helping you consider that there were costs associated with selling a house… now with no equity, and a house full of TVs, stereos, sports gear and a new car in the driveway, the average american doesn’t have the equity in their house necessary to even sell their house at today’s prices. This is how we got here… rampant consumerism, and unbridled lending. Brad K. Evans is a Realtor® in Denver, Colorado |
