The twin crashes the stock market and real estate, which began in 2007 have devastated the American people, how has nothing since the great depression. The American people are now far, far worse than they were before the twin crashes. But something very strange. The stock exchange in March 2009 the bottom and since then upward in a powerful bull-market rally, while real estate which has blown up favorite investment of the American people, and lives has turned most of their wealth still so slowly in the wind. It is time to ask an important question. What makes this strange divergence? Before we go further, I have to say that in this article use the narrow, popular definition of real estate. I refer to condos, town houses and single family homes. This article ignores residential and commercial real estate.

It is important to point out that until the last crash real estate, one of the largest had enjoyed sustained delivery of all time. You need to go back on the S & L crisis at the end of the 1980s, to find the last time, was not the real estate in boom conditions. This crisis ended in 1991, and from 1991 to 2007 real estate nothing indeed but rise. Everyone was a wave riding, they on lose could not. She had to really stupid or bad luck during will this fantastic 16 years to lose money. You will understand, for reasons that I never could understand people enormous difficulties that in residential real estate it is faster than people’s incomes increase, as people unable to qualify for the mortgage are impossible for prices for all time. This is exactly what has happened in the rest of the boom. All kinds of strange mortgages have been created, the problem is fudge, which might not qualified people for the houses, which they wanted to buy. The landscape dotted mortgages dampening mortgages with strange names such as weapons, ALT-A, negative, and of course the famous liar loans.

In 2007 was the yawning gap between what people honestly could afford, numbers and rising prices no longer about papered are and the whole lazy building collapsed. This year the median price home sold for $230,000, and the median income could budget afford, a house in the $150,000 $ 175,000 purchase price range by means of honest standards. Is in the other, which is exactly what median today sell price home. For the first time for many years, the average income can make American family to buy the prize home median. Then, I prefer an insider with 30 years in the assessment and a licensed real estate agents why the stock market to real estate? It is indeed fortunate that real estate is the sale for the first time at a price range that is affordable for the American people for many years but the $64,000-question is, will make what property values rise.

The answer, I fear, is that in the next five years there is almost nothing that I can see that, the a sustainable appreciation in property values at the national level will result. It is amazing to me that people figure out can, why are property values refuse dead in the water, and rise. Contrary to popular belief not properties in the value increase, because they do not, all more of them or some other idiotic popular delusion. Properties in the value for only one reason, and for that reason is because buyers engage, orders competitions to purchase properties. In the absence of invitations to tender competitions prices can not and will not increase. Now should the reader be obvious what is the problem. The problem is that the American people was financially devastated by the twin crashes from the stock exchange and the real estate market have. They are not more players. You are also broke, orders contests to engage. Until the crash, there were millions of active players across the country, which had a net worth at least $1 or $2 million on paper say, if not in reality that they could borrow against. There are no more large amounts of that player. You are ready, ready to be excluded and declared bankrupt. This now missing players were the heart of the real estate market and they don’t come back anytime soon. In fact many of them never come back. Their credit ratings have been destroyed and no bank lend them money. This is a deadly combination in the world of real estate. The stock exchange is sailing calmly for the best reasons. You need no credit to buy stocks review of 620 or better, and you need no bank loans to buy shares. Stocks are a cash market. In this sea of darkness is a light. Remarkable rise by the properties of the “buyer.” For the buyer with a 7-10 year time horizon real estate is a market that has real potential.

Fred Carach is the author of forty years A speculator. His blog is http://fortyyearsaspeculator.blogspot.com/.