In the classic Americana song The Class of '57 the Oak Ridge Boys opine that one of their class members ended up selling insurance and 'part time real estate.' Think about that. Back then one sold real estate part time. The reason was that not enough activity occurred to make it a full time profession. Yet as it turned out, real estate was the perfect vehicle for the upwardly mobile types that did not want to bother with the professional necessity of a college degree. A nice outfit, a few flashy terms like wrap around mortgage, owner carry, and 'after all you can itemize the taxes for an ordinary deduction while carrying forward the captial gain tax free' and you certainly look and sounded the part. This is a target rich scenario for the Tom Hopkins/Tony Robbins of the world. Wanna be successful, well by golly just think you are and you will be! Then couple all this with the go go inflation of the 70s that never stopped in Manhattan and California, not to mention commodity plays like Houston, and by golly, the full time real estate 'profession' was born!
It also used to be, back in that part time real estate sales era, that if you sold a house for what you paid for it, after living there a few years, it was a pretty good deal. Inflation of course coupled with drive by appraisals and easy lending standards, cemented the idea that 'real estate investing' was a permanent win win plus sum game! Meanhile, governments had reached their volutary tax limit so to speak. Voters would just not likely stand for more taxes at the Federal State City County Community College Hospital Port Authority level. What to do? Follow the Las Vegas lead and institutionalize gambling,hello lottery. And by the way, make gambling illegal for private entrepreneurs giving the state a monopoly. Now it is not uncommon to encoounter someone, never mind the improbably high odds, who believes they will win the lottery as a way of financing retirement. It is also no surprise that I recently encountered a class of 8th graders all of whom thought their junior high would grow (note I did not say graduate...) to populate the entire NBA! Reflecting the national gambling mania the stock market shot to 10,000 and higher and Las Vegas became the fastest growing large city in the USA.
So is it any surprise that individuals realized their 'real estate investment' a home otherwise known as a leveraged bet on a permanent housing bubble, was not appreciating. The result is that our 'homeowner' (really just a no asset debtor, the creditor 'owns' the house) simply walks away from the bet, er home ownership. And the fear of four million vacant homes is exactly what is terrifying Washington DC today. But then the 'house' never loses in a gambling situation,right? Maybe not....