Asia Times
columnist sees a new breed of buyer--one that will buy-to-rent, and be financed by, of all things, debt! And don't forget to click on the link to the award-winning photo of the foreclosed property at the end of the article.Asia Times
In 1977, the Swedish pop band Abba sang Knowing Me, Knowing You, a lover's lament over once-vibrant rooms and a home now being vacated by passion's demise.
These old familiar rooms, children would play,
Now there's only emptiness--nothing to say.
Walking through and empty house, tears in my eyes
Here is where the story ends--this is goodbye.
But that's probably not where the story ends--at least if the break-up took place in the United States. It's a lot more likely that it concludes at one of the thousands of court-adjudicated distressed home and property auction sales going on all across America, like the one I recently attended outside Seattle.
Before the deluge, before the CDOs and the CDSs, before AIG and Lehman Brothers, and the TALF and the TARP, were the homeowners who borrowed and bought more house than they could afford. The nightmare that their American dream turned into was the match that lit the powder keg of an overleveraged world.
According to Realtytrac, a real estate statistical service, 2.5 million American homes entered the foreclosure process in 2008, a number that had tripled just since 2005. For the first six months of 2009, foreclosures are running 15% ahead of last year's record, a torrid pace.
In 1942, Austrian economist Joseph Schumpeter, in his book Capitalism, Socialism and Democracy, extolled capitalism's virtue in regularly promoting what he called "creative destruction", that is, the ability to build new, successful capitalist enterprises on the wreckage of those that have failed. In many ways here, the auction struck me as a celebration the "creative destruction" of about 80 families' dreams of a better life.
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