SAVE THE COMMISSION!

We may be in the minority, but another writer agrees with me that the housing recovery is not what it seems. Here's the article:



Here's the pull-quote:
Real wages adjusted for inflation have been falling for the last three years.

Did you get that? Housing prices are rising at multi-year rates and hitting multi-year highs, but peoples' incomes are hitting multi-year lows. What does that spell? I can tell you one thing it doesn't mean: housing prices rising because homeowners are able to afford more expensive houses. So, if housing prices are rising as wages have been falling, who is buying? As the article points out, investors are the ones buying right now.

The trap that many people will fall into is that their home is actually worth what the current market is dictating. They feel richer, so they take out another loan out on their house (or use a HELOC already in place). We know how that ends, as it just happened less than ten years ago!

So, investors who know what they're doing will continue to profit. Homeowners who don't know (or don't want to know) what they're doing will think that they are profiting. As Warren Buffet said, "You don't know who's swimming naked until the tide goes out". We don't know exactly when the tide will go out, but it will at some point. Now is the time to make sure that you don't get caught in the trap!

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