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An Octogenerian's Blog | Private Property Ownership, Real Estate, Your Money (Issue 144)

As the credit crunch tightens, the price of houses decline, and mortgage payments still remain high, the housing market still presents problems for many.
 
I live in a town in Northeast Georgia by Lake Lanier—the nation’s largest man-made lake—an area where real estate was a large booming business for many years. Hundreds of very expensive homes were built around the lake, which covers five counties. Now, many of these homes in the million-dollar range and upwards are on the market with no takers.
 
Aside from the tanking of the housing market, the lake level has been so low the past couple of years that it’s difficult to lure buyers to this area. Consequently, there are many in this region holding the bag for an expensive house with a “for sale” sign and no buyers.
 
I hear about the moaning and groaning of holders of such properties. Many are in a state of denial still thinking the property is worth the original cost or more. Most any property could be sold in today’s market if the price was low enough. But so many hold out for a price and wind up in foreclosure.
 
I live on a street designated “historic” and many houses on this street have a “for sale” or “for rent” sign out front, many of which are overpriced and stand empty.
 
It seems the value system and thinking of the average person is behind the current market.  Some still believe their house purchase was an investment that will always appreciate. The value of anything is always subjective. To transfer ownership always depends upon what the seller is willing to sell for and the buyer is willing to pay. But for some, they are stuck with this idea that worth is what they determine it to be . . . some fixed amount. Many refuse to admit they made a mistake and paid far too much when they purchased the property.
 
It’s a difficult position for some to admit they made a foolish mistake when they purchased the property and are unwilling to take the loss, thinking someone else will come along and be as ignorant of the value as they were and bail them out, for which they hold on until they lose it all. Compounding the dilemma is the exorbitant cost of taxes on real estate property.
 
In my situation, I moved to this area a couple of years ago and leased the property, which was for sale at that time. Recently, my two-year lease came up for renewal and the owner wanted me to sign another two-year lease and I refused. He said the taxes would increase next year and if I was under a two-year lease I would not have that to be concerned about paying more. I’m not going be concerned about it whether or not I’m under a lease. If the price goes up because of taxes I can relocate to a less expensive place and buy or lease another property. There are plenty available in this area.
 
It’s an interesting phenomenon. So many people think the home they purchased to live in is like their personal bank. They think the money they pay on it every month is a deposit into their future, guaranteed to be there if and when at any time they decide to vacate and transfer to someone else. They think they would withdraw from the sale all they paid into plus a profit on their monthly payments. As if there is some invisible FDIC arrangement guaranteeing some kind of cashing in policy any time they needed it.
 
On the other hand, conditions in this country—economically speaking—are not what they appear to some and are changing so rapidly it’s not easy to keep up with what is taking place.
 
It helps to return to principled standards and separate truth from all the propaganda. Assume the responsibility of not falling into all the traps of the entanglements of semantics. The double think, double talk of modern day medicine men, hawking out verbiage and fostering ignorance of what is actually going on. We live in an information era where things are easily available and there is enough to read about to be informed to make sensible decisions about our lives, money and property. There’s so much deception and trickery it’s not easy to avoid the pitfalls. And conditions are such today it takes greater vigilance to be aware of all that goes on which effects our lives adversely.
 
I equate such happenings to quicksand. I recall growing up on a farm and walking quite a distance to catch the school bus. I had to walk by an area, a large hole, for which my parents warned me was quick sand. It looked like an area of pretty green ground covering, but they warned me it was actually a body of water covered with a layer of growing greenery and if I fell in, I would be sucked under, unable to get out. Quicksand is a pretty deceptive trap. I have always remembered that experience of walking by on a regular basis on my way to school.
 
From time to time, I have faced experiences in my life that reminded me of quicksand. And in today’s economy, there seems to be a lot of quicksand schemes, a proliferation of all kinds of quick money making schemes on the internet, on television ads and through emails. Presentation of ideas that appear to be so tempting all dressed up with flowery promises of “get rich quick” schemes.
 
Some now that are surfacing, which have been in operation for some time, like the Madoff exposure, reveal stories of how he has milked others out of $50 billion in his fraudulent financial schemes. We are living in a time that requires us to be more cautious, more thinking, more careful and better informed to avoid these quicksand schemes.
 
Fasten your seatbelts. We are in for a bumpy ride this coming year just around the corner.
 
Let Freedom Ring!

From “The Freedom Lady.”

JUST ME,
AC

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