The Tale of a House, and an Entire Market

Link to article

The article, "The Tale of a House, and an Entire Market" published by the New York Times, seeks to explain the roller coaster economy of the housing market. The author, Shaila Dewan, begins by concentrating on one house in Maryland to represent the "American Dream"; not only a home, but also an investment to turn around and sell it for profit.

The housing market fueled the economy as the bubble grew, and was soon to blame for the downturn of the past seven years. As the economy rebuilds, the housing prices have now jumped 10-25%; concerning economists as this could create, yet, another bubble. There are still high lending standards held by banks to discourage a second bubble, but this held back 12.5 million Americans from owning homes who would have qualified prior to the crash. Even those who had been approved have different feelings toward the American Dream, the home owned is still a better investment than renting, it is still a home, "But it is no longer an A.T.M., a source of ready cash for a better lifestyle."

The article continues through owners of the house in Maryland. Including one owner who ended up defaulting on loans that banks originally pre-approved her when in reality, she could not afford. The owner bought the house for $540,000 in 2006 only to be sold to an affiliate of Greenway for $215,000 cash in 2012. Greenway renovated the house to turn it around to sell it for $381,000 in 2013. This story of the Maryland house is interesting as it represents the twists and turns of the housing market, and how the winners and losers achieve their status based on timing. The article does conclude that some believe the even through the uncertainty of finances, owning a home is a "social safety net, whether or not is profitable." Some economists still argue that homeownership is overly pushed by public policy, where the return on investment is just too optimistic.