Last week I wrote a post called “The real problem with Higher Education.” The premise of the piece was to discuss the real value of getting a college degree. In other words … I challenged one of the basic tenants of the “American Dream.”
For the most part, the response was positive – the benefits of a college degree didn’t always out-way the costs associated with getting that degree. But then there were others, others that disagreed. Disagree may be a polite term. A few stopped only one step short of screaming blasphemy from the roof tops. “How could I even question the value system on which this country is built?”
Well … that was Part 1 of my dismantlement and reconstruction of the “American Dream.” Now welcome to Part 2 … The Fallacy of the “White Picket Fence.”
Even more than getting a college degree – home ownership exemplifies the “American Dream.” Challenging the “American Dream” makes people uncomfortable. After all, this is how we were raised. This is what we are supposed to aspire for. The tenants were, and are currently used, to determine our level of success in society. In the past owning a home was the equivalent of having a guaranteed high-return IRA … always increasing in value, often double digits annually.
Then came the ’90 and things changed. That investment sunk into the piece of ground you’re standing on had lost its inevitability. It lost its guarantee. I was living in Los Angeles from the late ’80s through 2000s. The first crash came in the Fall of 1981. Real estate values fell over 40% across all sectors – literally overnight. Within two months … nest eggs (in-cased in overpriced homes) – were gone! And with this went futures and the futures of children.
The next two decades brought several boom and bust cycles in the real estate market – with the last one hitting three years ago … and we’re still reeling! No longer is home ownership a “yellow brick road” to affluence and a prosperous retirement. Instead is seems more a trip to Las Vegas. The irony behind all this, is a normal investor, let alone a conservative one – would never put their life savings in just one stock in the stock in stock market. Yet that’s exactly what they’re doing with buying a house … especially in this time of economic uncertainty. And on top of it, a stock is a whole lot easier to dump than a house!
But still we persist … “home ownership must be the ‘be all end all’ goal.” After all that’s what’s what our parents, and our grandparents lived for. It’s the “American Dream.” To be a renter, except in only a few of the country’s most expensive markets – meant you were part of an assumed “lower class.” To not strive for that “White Picket Fence” was … well, just not American.
Well it’s the end of 2011 and were still hanging on to the tail of this stubborn recession. Home foreclosures are actually rising not declining. There will be more hardship before there’s less. The government is attempting to lessen the blow … but their gridlocked solutions are of little value to most in the dire straits of losing their homes, and their futures. I could go into detail, but it’s been covered ad nauseam by every news outlet, major and minor. Every community has more than its share of “sob stories.”
But aside from the financial roller-coaster home ownership can put you on – there may also be another issue at play here.
As we all know unemployment in this country, and if not worse in many others, is hovering around 10%. As this is only unemployment … underemployment is at least 25%. So much for that expensive college degree! Combine this job predicament with the millions of homes underwater, and families that are financially “up-side down,” owing more money on their house than it’s worth … you have a Perfect Storm!
And worse yet, very often these two factors exist in the same household. But there are opportunities that exist in many areas of the country. For example North Dakota has tens of thousands of high paying blue-collar jobs open right now. McDonalds is offering $15 an hour starting, and truck drivers can easily make $80k+.
But if you’re stuck in the quicksand of a “ball and chain” mortgage … these opportunities, whether in North Dakota or in other boom areas – are nothing but a “pipe-dream,” a dream that can never be realized.
All of sudden being part of the underclass of renters doesn’t look so bad. Without the encumbrance of a mortgage, the renter can follow the opportunities. Mobility in this country is at a forty-year low. I believe this is a direct result of the housing crisis (along with the student loan burdens). I don’t think that Americans don’t want to move … they just can’t.
Maybe it’s time to re-evaluate the “American Dream.” Times are not the same as they were for your parents. And the conditions required to achieve success and happiness during those times aren’t either. In this day and age, success requires flexibility, it requires mobility. Any obstacle you put in the way of these two conditions will greatly diminish your chances. Unfortunately, home ownership might very well be one of those obstacles. Just as college and its accompanying debt, home ownership and its accompanying mortgage could be more of a liability than an asset.
As times moves on, and things change – we have to recognize that maybe so does the definition of the “American Dream.” Instead of tying ourselves to a place, a place that may or may not be conducive for our long-term well-being … maybe we should look at flexibility, at mobility as the preferred course of action. These crazy economic times are not going to change anytime soon. You can’t, and the government can’t change that.
There are opportunities out there, many of them. They’re just not in the same places – professionally or geographically, they used to be. You have to go where they’re at … literally and figuratively.
The last thing you want to do is to have that beloved “White Picket Fence” … turn into prison – keeping you from the opportunity to pursue and achieve your future and your dreams.
I can be found on Twitter at @clayforsberg