This morning I heard part of a news broadcast bragging about price increases in real estate and the stock market. The announcer was pretending that having a price increase means a strong market. But it doesn’t mean that. These price increases aren’t something to celebrate for most of us.
The stock market has little basis for price increases and many are extremely concerned that the stock market is going to crash.
I look at real estate across the nation as part of my information acquiring routine in order to keep track of price changes. Over the last few weeks there have been enormous price increases across the West and even in the South. Montana properties aren’t affordable anymore and there’s fewer worthwhile properties on offer. I saw what looked like an abandoned army barracks in the middle of nowhere in Montana with acreage on offer for $300,000 and the property was in bad repair. In the South, I saw a $325,000 increase since just a few months ago on a property that also came with acreage.
As this process of inflating prices continues it doesn’t make the use value any better. We are all losers in this price increase. There aren’t jobs enough to allow people to buy these properties as a place to live. As an asset, the price increase in real estate has been caused only by investors fleeing an overpriced stock market and buying real estate. When a stock is on offer for a new company and sells, it does the buyer no good if that company fails soon after. Old companies fail too and stocks will fall when the Federal Reserve eventually stops pumping the market with borrowed money.
Price manipulation is easy as we have seen over the last 13 years. Creating wealth is harder. Wealth creation isn’t possible when we are being immersed in liquidity gambles over the short-term. This price manipulation will end in tragedies large and small.
Where will anyone find refuge in a falling market with a failing currency? Certainly not in digital monies which will be at least as unstable and easier to manipulate. The outcome of deregulation in banking is taking us all to the poor house. The shables that money overprinting, stock market underwriting, real estate price increases, and more inflation in food and energy will make of our economy will soon be obvious to everyone.
Investors have bought so much real estate in the United States that Americans are now facing real financial problems wherever they live because of the impact of property taxes. The rate of price increases in U.S. real estate is outpacing inflation by a large margin yet while Americans can avoid spending money in some inflated areas of the economy to try to discourage price increases they can’t do that in the real estate market.
Even if a person can’t afford to buy a house, they still have to live somewhere and that means they have to pay real estate taxes through their rental fee. Municipalities that are gathering in this tax seem unconcerned about the impact of price increases in rent and mortgages. Some are now suggesting that this real estate grab by investors will drive people out of single family housing altogether after taxes make owning a home unaffordable to most people during our current economic conditions.
Property taxes were once based on market prices set by home buyers who wanted the use value of living in the home and that was acceptable before asset investors started fleeing their Wall Street insecurities and retreating into real estate. Now prices in real estate have been blown out of proportion when compared to the use value of housing.
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In the recent past, a person could build their own house as a way to save money in real estate. Recent price increases in building materials are now making that unaffordable as well. As investors panic about their doomsday fears of a market collapse, they cause financial suffering among renters and buyers because they are buying so many houses. It may therefore be time to reduce real estate taxes across America.
An alternative may be to ban asset investors from American real estate. Many asset investors come from foreign nations and have no stake in the state of American real estate except as an investment haven. Casino investment strategy on Wall Street is impacting main street directly through increases in property tax. Deregulated markets are to blame as well as easy money policies by the Federal Reserve. The Federal Reserve promises to keep interest rates artificially low for two more years and the Federal Reserve ignores the suffering that their policies are causing Americans. Ordinary Americans suffer under easy money policies and we’ve been suffering too long as it is.