Why Most Homes Will Be Worth $0
Ask yourself, how much home can a person afford if they have no income?
Then ask, how many Americans will likely lose their current jobs, and remain unemployed for a protracted period of time as America morphs from the Industrial Age to the Digital Age AND we contract credit from the biggest credit bubble in history at the same time?
Then ask, how much are homes worth if most of the homes in a neighborhood are in foreclosure or perceived that it will be that way in the not too distant future?
This is not the end of the world.....it is simply change......radical change.
Laws will have to be changed. Contracts adjusted. Expectations shifted. Outlooks will improve as me move forward....but the adjustment will be convulsive.
Many of the businesses currently operating will be bankrupt or gone relatively soon.....the model will simply not fit in a digitally delivered society......there are lots of buggy whip manufacturers out there right now borrowing massively from our pension funds and retirement accounts simply to keep the doors open.
The near term trend will be drive to efficiency.
One way we can start to drive BIG savings is consolidate government....merge two or three or five cities into one entity....same with counties and maybe even states......in doing so we could substantially drive down costs by removing redundency.
The problem will be dealing with the millions that lose their jobs and the resulting impact on real estate.....a primary driver of revenues to government. In Concentric Contraction....each default has a counterparty or more impact......thus, multiplying the convulsive effect.....not too different than throwing a firecracker into a munitions shed.
We will have to adjust our perception on housing very soon......it will be forced upon us whether we like it or not.