The Deadman Night Rider

A forum for evening students of the SMU Dedman School of Law and other outlaws..

Thursday, February 28, 2008

A nation fit to be slaves...

A few days ago I saw a TV ad from the National Association of Realtors that I haven't been able to get out of my head. Teeing up a montage of picket-fence scenes with lots of photogenic youngsters running around, it opened with this great line:

"When buying a home, family concerns often outweigh economic concerns."

Wow. In a rational world, shouldn't economic concerns be family concerns? I couldn't find this particular commercial on the net, but here's another one just like it. Here some of the wise words NAR hands down in this one:

"When you have a family it's always a good time to buy..."

"Didn't make sense for us to spend the same amount of money renting something when we could own it..."

Maybe in a weird way the sub-prime mess will be a good thing if it can finally break us of these childlike notions masquerading as good sense. I can definitely recall that as recently as a year ago, no one would have questioned these airy truisms. Luckily, though, some break-throughs are forming--I was heartened by these words from Slate's economics columnist not long ago:

Most people do not seem to see the cost of a house in the same way that they see other prices. House prices are simply viewed through the lens of monthly repayments that either can or cannot be afforded. We spend time and money insuring ourselves against some losses, such as a malfunctioning washing machine, yet the value of the house we own (or the cost of the house we might someday want to buy) fluctuates by far more, perhaps on a daily basis. Nobody cares, nobody hedges the value of their homes—although it is not hard to do so—and nobody seems to compare the price with any meaningful alternative, such as retiring 15 years early.

I'll end on the same note that the NAR commercial I saw ended on: it claimed something to the effect that most homeowners had 60%(!!) of their net wealth in the equity of their homes. Again--that was supposed to be some kind of selling point for jumping into buying a house. When you can see why this is terrible investment advice, grasshopper, you are ready to leave the Shaolin temple...


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