It would seem to me that the collective self-worth of homeowners in the US has soared in the past four years as home values soared. These feelings of good cheer then translated into nice new Hummer H2's with the spinning rims, trips to Antigua and shopping sprees at Nordstroms to name a few.
Cocktail party chatter moved away from "how's the kids doing in school" to "how much have you made on that brilliant decision of yours to buy a new tract home in Mesa?"
People walked around with a spring in their step as they enjoyed their inflated self-worth, and inflated paper-gain "retirement portfolio" consisting of one house.
And some took it to the next step, rushing out to buy "investment property" thus increasing the "paper gains" and feelings of brilliance and self-worth.
Well... how quickly things change....
Now that home values are plummeting, led by second home "investment property", and housing panic is in the air, I would surmise that these feelings of inflated self-worth and good cheer are crashing as well.
Thus, crashing as well shall be the shopping sprees at Nordstroms, purchases of new Hummer H2's with shiny rims, and the reservations to Antigua.
Get ready America. The collapse of the housing myth, and the Real Estate Industrial Complex, are already here. The collapse of consumer confidence and discretionary spending are next.
June 28, 2006
Posted by blogger at 6/28/2006