The Real Estate Wealth Illusion

My grandfather was a very religious man, although not in a particularly organized sense. When he sold his house in Seattle about 1953 to move to our family compound on the west side of Puget Sound, the fact that he would get more money for it than he had paid caused him some moral concern. Somewhere in the Bible it says you aren't supposed to make money without working for it. My grandmother eventually convinced him that it would be all right.

The reverse attitude was shown by the couple who bought a big house somewhere in the Riverside/San Bernardino area with the thought that having invested $1.4 million for much more housing than they needed, they could sell it in ten years for $5 million and retire on the gain.

There have been a few lucky people who have cashed out as a result of the real estate bubble, but I don't know how anyone ever thought it would work for the United States collectively. If we, the boomers, want to retire some day, we'll need to leave behind us highways, airports, factories, dams, bridges, and lots of other things with which our children will be able to produce goods and services, enough for themselves and us as well. Building excessive houses and living in them isn't going to lay the groundwork for a prosperous future for the country.