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Where Every Issue is a Green Issue| Providing Wisdom in Building a Sustainable Future | ||||||||||||||||||||
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Benefits of the Home Mortgage Collapse? By Jon Dougal As the financial markets reel under the pressure of sub-prime lending policies, and home prices drop like stones in a vacuum, could there be a benefit to consumers? Foreclosures are mounting, but major mortgage holders are reticent to drop prices to realistic values in order to move their rising inventories of repossessed homes. As their inventories climb, they will of necessity have to drop retail prices to move the inventory. The probability is they will wait too long, then all mortgage holders will dump a the same time. Yes, this will in all probability cause all home prices to drop in the $200K-$800K range. The potential benefit could be that people start moving into city centers, instead of huge commutes from urban fringes, driving density levels to new highs, have fewer cars, take public transportation more often, and generally have more time to recreate near their new urban dwellings. Having fewer cars per family will or should allow lenders to finance more of a mortgage because less is being spent on the owning and operating of a commute vehicle. Another facet of benefits could be that oil demand goes down followed by lower gasoline pricing. It could happen! |
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