Meanwhile, in a news conference following the Bank of England's quarterly inflation report yesterday, governor Mervyn King said that the Bank believed the ratio of house prices to average earnings was "unsustainable" and would adjust over the next two to three years.This is meaningful to me because Britain has been experiencing an even worse housing market inflation than the US, and prices have been skyrocketing all out of proportion to the average wage there. It's been my personal feeling that the similar growth we've seen here in the States, fueled by low interest rates and ridiculous debt accrual, must inevitably crash. This report from the UK, combined with Greenspan's hike in interest rates here, plus the fact that he's painted himself into a corner with nowhere to go but interest hikes, tells me that in about 5 years (providing you've been able to hang onto a job and not lose real wages--uncertain with The Thing That Wouldn't Leave remaining in office), you might have a shot at buying a more realistically priced house.
People have been buying houses at such inflated prices that when the market eventually deflates, I can't see how they will ever get their money back if they try to sell. It's what salespeople call being "upside down": owing more than the thing you bought is worth.
Meantime, bankruptcies and foreclosures are through the roof. People have been borrowing heavily against their homes' equity in a drunken blur, and are either driving themselves toward the inevitable bankruptcy or putting the final payoff completely out of reach. In the latter case that they will either be paying their mortgages till death, or be left with such a pittance on resell that they'll be hard-pressed to afford another one.
Yet, look around you. Everywhere you turn, green space is being devoured for cloned McMansion developments, prices starting at a cool quarter mil. New homes at this price level have never been so cheaply built, so charmless and anonymous, so absurdly and obnoxiously vast. Who lives in these things? How can they afford them? What kind of work do they do? And have they no shame, rattling around in these jumped-up boxes the size of public buildings, mowing down needed habitat, eating up public space, cutting off access to wild places, unable to use even half the space they take up, and spending hardly any time there anyway? This, at a time when homelessness and poverty are greater than ever and growing, and the differences between those in the gated communities and those in the slums promises to become positively Dickensian.
Remember the old small-is-better movement, when people were encouraged to leave a light footprint, and a sustainable lifestyle was thought to be a good thing? Those folks were marginalized a long time ago. Disposability is the order of the day, and be sure to amass plenty of crap to dispose of. People used to make things and do things as hobbies, and the fruits of those hobbies were the identifiers of their makers. Now people buy things. They create almost nothing anymore, and they identify themselves by using and wearing things made by others and marketed cynically to them with the same bald greed with which they are bought. Houses are bigger and stupider because we are, too. We wear our houses, we wear our oversized cars, we even wear our children and their good schools and sports trophies. The fact that Lincoln-Mercury could use Peter Gabriel's "Big Time" to sell their bulgemobiles without even a hint of irony says it all. We've become hulking, huge, and stupid, even as we get the vapors over the number of carbs on our plates. The bigger the shells we accrue around us, the smaller the tiny spark of humanity inside them becomes.
One day, that spark may just disappear altogether, but no one will notice. Our houses will be so big no one will be able to find us in there, anyway.