Last night, or night before last, I listened to one of the Fox Business Channel commentators, I think Rebecca Diamond was her name, bemoan the “fact” that her house was now worth less than it was when she bought it, that she had put up a 30% down payment and that was now gone.
I was slightly shocked. This woman actually worked on a business channel and considered herself a “business expert”?
Rebecca Diamond of Fox Business on the Price of Business
First of all, I suppose if Ms. Diamond were planning on selling her home today, she would taking a beating on the price. So … was she planning on selling her home? If not, what’s the problem?
She has a place to live and I presume she can make the mortgage payments as well as cover the other costs of home ownership.
I think this is a classic case of not being able to see the forest for the personal trees called “greed”, “unrealistic expectations” and “lack of perspective”.
If Ms. Diamond bought her home as a simple investment, then she should look at it as a simple investment and consider it as having the same risks as other investments. If you buy a stock at it’s peak, you’re going to loose money if you sell it in its trough. Otherwise, all the gains and losses are simply on paper and will vary from day to day as the market fluctuates. I would presume that Ms. Diamond bought her home as a long term investment, if she considers it an investment, and should take a more long term perspective on the purchase rather than bemoan a market fluctuation that could have been predicted four years ago.
Frankly, I don’t understand people’s irrational thought and behavior about the current housing market. For some reason, now … all of a sudden … house prices are supposed to be “guaranteed”. Tell that to the person who bought a home and business on a U.S. highway just before the interstate system moved the heavy traffic 50 miles away and killed his business as well as the value of his home.
Housing bubbles and land bubbles come and go. Ms. Diamond is probably too young to remember the bubble that burst back at the end of the 1970’s. Back then, at least where I grew up, it was more of a land price bubble. The price of farmland had climbed to $1500 to $1800 an acre where I lived. Suddenly, it was selling for $300 or $400 an acre. The farmers who bought land at the high prices lost their investments and livelihood. And, they lost the money of those they had borrowed from. Does this sound familiar?
Grow up, Ms. Diamond. Better yet, know what you’re talking about … other than your own self pity. Stop being a “talking head”.