In a recent interview on Financialsense.com, Robert Shiller one of the principals of the S&P Case-Shiller housing index, opined that housing prices may not recover for quite a period of time. In fact, he pointed out that homes in general can no longer be expected to appreciate as they have in the past.
This troubled American economy has not produced enough job growth nor for that matter any appreciable income growth. That spells trouble for the housing sector.
Many of my friends in both the commercial and residential real estate markets know what must be done. An economic environment for business growth and job creation must be fashioned. Under the current administration in Washington, D.C., that is unlikely to happen. What might happen in this current stage of deleveraging, a demand for smaller houses; more affordable homes.
The net result would be the downsizing of housing.
What If, the current administration elected to sell off inhabitable lands not far from communities with the necessary resources to build? The lands could be subdivided into lots and be sold off to U.S. Citizens to start a new American dream of home ownership. It would be a kind of Homestead Act 2.0 Perhaps they could be called Obamaville’s. A bundle of smaller, leaner residential areas. Heck, an Urban Homestead Act could be created to infuse development in urban wastelands like Detroit, Michigan.
Sounds far-fetched, doesn’t it? It could happen as many Americans have already resigned to the fact they have to live smaller. The era of living large is over. Shame that attitude has yet to be discovered by the folks in our nations capital.