Meaningful Returns

“One in four homeowners in the Las Vegas area owes more to the bank than his or her home is worth.” The colloquial term for this unfortunate reality is “underwater,” and while it is certainly pronounced in Las Vegas (and Akron and Cleveland, apparently) in the wake of the housing crash of 2008, you can find its presence anywhere.

Now there are a number of complicated and inextricably interconnected reasons why one in four homeowners in Las Vegas is underwater on their mortgage, but there is one and only one that I wish to focus on today:

“that core American belief that buying a house was a foolproof path to security and prosperity.”

You buy a house to live in. That’s it. It has some benefits, perhaps. It can help you avoid rent increases and maintain a sense of permanency in a neighborhood and give you plenty of walls to paint and yard to mow, not to mention some amount of social capital that will require you to continually upgrade your home to maintain. But a home is not designed to provide you with financial security. It is, at the risk of sounding repetitive, for living in. So any long term financial security or prosperity derived from one is purely coincidental and, to be honest, lucky.

Maybe this sounds jaded? I don’t know. I don’t mean to be jaded. But again, one in four homeowners in Las Vegas is underwater. You probably know someone who is underwater. And that reality is not just unfortunate. I mistyped that earlier. It’s tragic. It’s artificial poverty. It’s keeping us from living life as it was intended to be lived.

So, if we took that “core American belief that buying a house was a foolproof path to security and prosperity” and burned it in a raging dumpster fire, maybe it would be one in five, or one in ten, and you might not have a friend who’s trying to decide whether to short sell their home or continue making payments on a vastly overpriced set of bedrooms. And if that’s the case, you can call me jaded all you want.