I recently read that experts say that a person’s primary residence comprises over 50% of their financial wealth.
Everyday, we have been hearing about the troubled times our country is facing. The government takeover of Fannie Mae and Freddie Mac. Lehman Brothers, Merrill Lynch and AIG, what will be next? Now, the government has come up with a plan to help bail us out. No one know what lies ahead.
Today, that can be a scary prospect.
Remember the tech stock market? All of those companies values were based on overinflated numbers on a sheet of paper. Those were never true values, except for people that sold during that time and walked away with a pocket full of money. Then the bubble burst.
Then came the real estate bubble. Was that any different than the stock market bubble? I think not. Weren’t the values of homes at the peak of the market in 2005 based strictly on overinflated values on a sheet of paper? The only owners that truly reaped their wealth were those that cashed in and sold their homes during that peak in the market. Those that didn’t sell gained nothing, except maybe higher tax and insurance bills.
Many of those that bought, got stuck.
So, if it’s true that 50% of an owner’s financial wealth is found in their primary residence, and our real estate market is going through a time of correction in certain parts of the country, an owners “savings” may be dwindling down to nothing (if they aren’t already upside down or going into foreclosure).
These are scary statistics in today’s uncertain times.
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