On March 17th 2008 I wrote: Home Ownership, The Biggest Financial Scam of the 20th Century. I said that home ownership is a terrible way to build wealth and that in fact it won't build wealth for the majority of people who own a home. I said home ownership as a way to build wealth is a scam because all of the participants in the housing bubble knew that long term home owners would in fact lose money on their homes. My article was controversial. I quoted financial planners, the comments that I received from the many sites the article was published were largely skeptical. In December, Dennis Cauchon of USA Today wrote: Why Home Values May take Decades to Recover. Yale Economist, Robert Schiller wrote about the long-term appreciation of home values. It is about as dismal as the long term appreciation of stocks that I outlined in The Great 401K Experiment.
Why Home Values May Take Decades to Recover:
Dennis Couchon, USA Today
Rick Wallick moved into a new, three-bedroom $200,000 home in Maricopa, Ariz., in October 2005. Today, the home is worth $80,000.
The disabled software engineer stopped making mortgage payments this month. His $70,000 down payment is now worthless. His dream house will be foreclosed on next year.
"We're so far underwater it's not funny," says Wallick, 57, who had to return to his original home in Oregon to care for a sick family member and tend to his own medical problems. Wallick, one of the hardest-hit victims in one of the states hit hardest by the housing crisis, lost 60% of his home's value in three years.
His story is an extreme example, but home values have fallen so sharply since hitting a historic peak in the spring of 2006 that many Americans are wondering how much more prices can sink...click for the rest of the article.