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by tostitos1979
3743 days ago
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I've also been thinking about the long-term effects of the current situation and I don't see anything good. All this QE and low rates have caused people to borrow like crazy. I'd say people are either max'ed out or near that after 5-8 years of "partying". Even people who tripled their home value are at the trough taking out HELOCs (home equity line of credit). A debt is a claim on future income. If most of my future income is already spent, who the heck is going to spend in the future? The young (demographics in most developed countries aren't too great)? The professionals have significant student loans. Maybe the young who got cheap educations, earning great salaries able to live in low cost of living areas? I am surprised the baby boomers aren't downsizing in droves at this point. They should be the ones getting out of homes, locking in their gains and grabbing a condo where they don't have to spend too much effort doing maintenance. I suspect some are holding onto their homes for their children's sake? |
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Based on people I know, I think a lot of it is that if you own a typical suburban/exurban house and you have the house like you want it, you like the location, you have friends in the area, etc., for many, it's just not worth the trouble/expense of moving even if they could potentially downsize. The exceptions that come to mind are a few people who wanted to move to a warmer climate and/or adopt an urban lifestyle with their kids out of the house.