I suspect that homeowners discovered that they were sitting on investment vehicles in the 1970s, because they had the benefit of a debt at a fixed nominal value and rate while inflation was booming. Yay leverage.
As for blockbusting, even if you as a homeowner don’t expect your home to appreciate in value by 10% every year, you don’t want it to drop by 50% in six months because “three of your neighbors on this block are selling their houses and one of the buyers has a cousin who’s moving in next week, as soon as he gets out of jail”—which is the sort of scare tactics that blockbusters were using. (To be clear, the ex-con cousin was no more real than my girlfriend in Canada.)
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Date: 2021-09-26 04:08 pm (UTC)I suspect that homeowners discovered that they were sitting on investment vehicles in the 1970s, because they had the benefit of a debt at a fixed nominal value and rate while inflation was booming. Yay leverage.
As for blockbusting, even if you as a homeowner don’t expect your home to appreciate in value by 10% every year, you don’t want it to drop by 50% in six months because “three of your neighbors on this block are selling their houses and one of the buyers has a cousin who’s moving in next week, as soon as he gets out of jail”—which is the sort of scare tactics that blockbusters were using. (To be clear, the ex-con cousin was no more real than my girlfriend in Canada.)