“The rich aren’t as rich as they used to be.”
-Alex Rodriguez, a real estate agent with JM Group USA
Real Estate agents are masters of the obvious, aren’t they? “This is the kitchen” they proclaim, as if a buyer couldn’t deduce that from the refrigerator, stove and dining table.
And so, too, is that obvious quote up top. Yes, the rich have less money. But so does nearly everyone else. With the rich, the amounts in question are simply much greater, individually and collectively, in terms of assets lost. As David Rosenberg of BusinessWeek has pointed out, “In 2009, household net worth contracted nearly 20% over the past year and a half. That’s an epic $12 trillion of lost net worth, a degree of trauma never seen before.”
The improvements in housing appear to be driven by lower-end subsidies. The most recent housing data makes clear the dominance of low-end sales. Nationwide, last month’s existing home sales saw a 60% increase in cheaper condos and coops.
Hat tip: BusinessWeek and Riholtz