It is said to be bright is to learn from one's mistakes, to be genius is to learn from the mistakes of others. How many geniuses are among us since only history can teach us about this economic event. We haven't made these mistakes before.
In the first quarter, annual national housing prices fell 19.1%), quarterly (-7.5%) and monthly (-2.2%) data continue to show prices reverting back towards levels not seen for years.
One of the truths revealed in housing collapse is that a house is not an investment, it is a consumption expense. If one is fortunate enough to have no mortgage and not on the edge of downsizing, trading one abode for another is neither pain nor gain. However in a debt burdened nation of mortgages, the debt on a value of declining value is a huge problem.
It is not always easy to have perspective, particularly in housing. Housing is a cost/price that has generally only gone up in our life times. Unlike most people I have the benefit of living in a house that is more than two hundred years old. In researching the deed and changes in ownership over those years I have seen this very house decline dramatically in price twice in its history. Now perhaps a third time. It doesn't take a genius to see history repeats.
John Barnyak
President
www.stonehouseasset.com
