The American Dream Shrinks: Avg. Net Worth Falls 40% From 2007-2010

[Teh One Who Knocks]

By Stacy Curtin | Daily Ticker


http://i.imgur.com/2OmHE.jpg

The slow death of the American dream for middle class families has continued in the last couple years in the wake of the financial crisis.

A new survey by the Federal Reserve shows a shocking decline in the average net worth of U.S. households from 2007 to 2010. According to the report, which adjusted figures for inflation, the average American family saw their net worth drop 40% in that three-year time period from $126,400 to $77,300.

Three-quarters of the loss, not surprisingly, is due in large part to falling home prices, which have seen no reprieve since the housing bubble began to burst in 2007. The average homeowner saw their net worth fall more than $70,000 from roughly $250,000 in 2007 to $175,000 in 2010.

But what is surprising is the fact that overall net worth has fallen to levels not seen since the early 1990's, long before the housing bubble even began.

In three years, 18 years of savings have been wiped away for the majority of the country and at the same time wages have fallen. The average income fell from about $50,00 in 2010 to $46,000 in 2007.

But this negative trend does not stop there. As average families become poorer, rich Americans are growing richer. The Fed survey showed the wealthiest 10% of families actually saw their net worth rise from 2007 to 2010. Over that time period, their net worth increased from $1.17 million to $1.19 million.

As Aaron and Henry discuss in the accompanying clip, the continued decline of the American middle class and the ascent of the rich has resulted in income inequality at levels not seen since the Great Depression. Many economists agree, including Nobel Prize-winner Joseph Stiglitz who recently joined The Daily Ticker to discuss why growing wage and income disparity endangers the future of our country.

While the bulk of consumer spending has historically come from the middle class, if the majority of Americans continue to suffer from falling wages and income, eventually something has got to give. There is no possible way for the super-rich to buy enough stuff to float the entire U.S. economy.

It's growing increasingly clear that we live in drastic times and drastic measures must be taken to save the country's middle class. One drastic measure is that more Americans are putting off retirement because they simply can't afford it.

But with Americans living longer and putting increased strain on programs like Social Security and Medicare, the retirement age is going to have be raised for one reason or another.

[Muddy]

My shit grew...

[DemonGeminiX]

My shit grew...

:-s

After you dropped it into the toilet?

[Muddy]

:-s

After you dropped it into the toilet?

Well... It is long you know...wink wink

[KevinD]

Hmm, yeah, I'll buy that. Home owners (sic) fell in large part due to the housing burst, where homes were (at least in my area) vastly overpriced to begin with, then couple that with loans that many should have NEVER qualified for. Yep "Net Worth" fell.

As for the "rich", unless I'm doing the math wrong, $1.17 to $1.19 million is only 2% in 3 years. I'd fire my money manager if that was all I made...

So, yeah, whatever. BS spin stuff.

[DemonGeminiX]

My house was appraised at $230K back in 2007. Several weeks ago, it was appraised at $180K.

[KevinD]

Exactly. I bought in 2006, appraised value at $95k. Now it's at $120K. I was fortunate, bought at a good time, with a good interest rate, and didn't buy outside my budget. One of my good friends is did all the same things as I did, but his situation is similar to yours DGX. He owes more than his house is worth now.

[Richard Cranium]

I sold my PHX house in 2005 for $320k with a bidding war on the front yard the day it went on the market, I bought it in 2003 for only $135k..

[Godfather]

The average price of homes in that time in Vancouver is up a few hundred thousand in that time but this market isn't indicative of anything other than Chinese people liking this city and buying houses by the dozen, forcing young families further and further into the suburbs :wha:

Portfolio wise my shit has been fairly stagnant the last couple years...

[RBP]

The average price of homes in that time in Vancouver is up a few hundred thousand in that time but this market isn't indicative of anything other than Chinese people liking this city and buying houses by the dozen, forcing young families further and further into the suburbs :wha:

Portfolio wise my shit has been fairly stagnant the last couple years...

:racist:

[Leefro]

Is this bloke trying to do the Elephant ?

http://i.imgur.com/2OmHE.jpg

[Godfather]

:racist:

It's really not. There are tear-downs for sale for over $1 million in Vancouver, and it's one of the costliest cities in the world. Sure it's a nice city, but it's not Canadian or North American money doing that.

[RBP]

But it is... you can't single out a nationality and blame them. Reality is moot.

[Godfather]

Well I'm a better man now, thank you. I'll find a new place to direct my frustration.

[RBP]

Well I'm a better man now, thank you. I'll find a new place to direct my frustration.

wtf? argue god dammit. That was a completely lame response.

[Godfather]

:lol: What can I say, housing prices average $900,000 in Vancouver and $300,000 the rest of the country. Short of winning the lottery, I won't be able to buy a home and raise a family in this awesome city. A little xenophobia seems to be the only thing to do :lol:

[Muddy]

I sold my PHX house in 2005 for $320k with a bidding war on the front yard the day it went on the market, I bought it in 2003 for only $135k..

That's a helluva return..!

[perrhaps]

This "report" is totally specious! The Bojangles says the private sector is doing fine.

[Hal-9000]

:lol: What can I say, housing prices average $900,000 in Vancouver and $300,000 the rest of the country. Short of winning the lottery, I won't be able to buy a home and raise a family in this awesome city. A little xenophobia seems to be the only thing to do :lol:

300k will buy you a refurbished condo here...if you're lucky

[Muddy]

300k will buy you a refurbished condo here...if you're lucky

So how do average guys afford their own dwellings?

[Hal-9000]

So how do average guys afford their own dwellings?

You don't...you either get a partner with a job or you never buy a house. Our house prices are similar to GF's. If you work a blue collar job like mine, you won't get approved for a mortgage even if you can make the payments. They claim - The buyer won't have enough for living expenses monthly, after paying the mortgage/heating/water bills.

[Muddy]

Well that's ridiculous.. I cant believe there arent affordable homes in your area.. You cant tell me your parents house is worth 900k..

[Hal-9000]

my parent's place was appraised at 480k.....one level bungalow, nearly 50 years old.The lot and proximately to schools/stores/services account for a fair amount in their case..

Think about the math.I take home less than 31k per year, even a 'crappy' house at 400k combined with the mortgage rate would take me half a century to pay off....not a good gamble for the bank.

[Muddy]

my parent's place was appraised at 480k.....one level bungalow, nearly 50 years old.The lot and proximately to schools/stores/services account for a fair amount in their case..

Think about the math.I take home less than 31k per year, even a 'crappy' house at 400k combined with the mortgage rate would take me half a century to pay off....not a good gamble for the bank.

Thats nuts man.. You guys money system is out of whack.. How can $35,000 worth of building materials on a $50,000 lot be worth 500k ?

[Hal-9000]

Thats nuts man.. You guys money system is out of whack.. How can $35,000 worth of building materials on a $50,000 lot be worth 500k ?

I really don't know....when I was in my 20's and 30's, a nice house could be bought for 150 grand. Since we live in an oil economy our city is in a constant state of growth and inflation. In a recession or when no one is selling or buying, the housing prices rarely drop.

I've said it lots of times here....you guys pay less for everything and get paid more for the same jobs. Your cost of living is so far below what we endure, that you should never complain.Everything from food to vehicles to clothing to services are cheaper down there.

and as you know being a parent, years of that can kill a household....making you 'house-poor'. (you mortgage a house but are in hawk for everything else)

[Muddy]

I really don't know....when I was in my 20's and 30's, a nice house could be bought for 150 grand. Since we live in an oil economy our city is in a constant state of growth and inflation. In a recession or when no one is selling or buying, the housing prices rarely drop.

I've said it lots of times here....you guys pay less for everything and get paid more for the same jobs. Your cost of living is so far below what we endure, that you should never complain.Everything from food to vehicles to clothing to services are cheaper down there.

and as you know being a parent, years of that can kill a household....making you 'house-poor'. (you mortgage a house but are in hawk for everything else)


It's time to move to a different area homeboy..

[Hal-9000]

It's time to move to a different area homeboy..

Naw...it's my fault too. Never got married or planned a life with a partner. And I never set my goals high enough in the job market (or school) to aspire to anything that makes 100k/year.

I can't bitch at a doctor who makes 250 thousand per year because I've never gone to medical school...that's my bad

[Muddy]

Naw...it's my fault too. Never got married or planned a life with a partner. And I never set my goals high enough in the job market (or school) to aspire to anything that makes 100k/year.

I can't bitch at a doctor who makes 250 thousand per year because I've never gone to medical school...that's my bad

You shouldn't need a college degree to live where your parents do... (respectfully of course :lol: )

[Hal-9000]

You shouldn't need a college degree to live where your parents do... (respectfully of course :lol: )

it is a slam....their neighborhood is one of the nicest in the city. A lot of people look to buy in the S.W. (our corner of the city) because of greenspace, proximity to schools and shopping and something else that's too racist to print here :lol:

their house is average comparatively, I understand what you mean..

[Muddy]

I'll post a little later what 485 gets you around here..

[Muddy]

Here's a link..

http://www.realtor.com/realestateandhomes-search/23060

Heres 469k for you..

http://www.realtor.com/realestateandhomes-detail/5600-Olde-Hartley-Way_Glen-Allen_VA_23060_M57616-59681

[Hal-9000]

I'll post a little later what 485 gets you around here..

:hand: I'd have to learn the language

[Hal-9000]

Here's a link..

http://www.realtor.com/realestateandhomes-search/23060

Heres 469k for you..

http://www.realtor.com/realestateandhomes-detail/5600-Olde-Hartley-Way_Glen-Allen_VA_23060_M57616-59681


from the top link, the 4 houses on the top of the page? The one listed for 595 would easily go for over a million here..

[minz]

Here's what you get for your money around here.

http://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E17402&radius=5.0

[Hal-9000]

Minz, they used the term 'detached' quite a bit...


Over here we have apartments (attached) condominiums (attached) and houses :lol:


do you guys have a lot of attached houses or something?

[Hugh_Janus]

Here's a link..

http://www.realtor.com/realestateandhomes-search/23060

Heres 469k for you..

http://www.realtor.com/realestateandhomes-detail/5600-Olde-Hartley-Way_Glen-Allen_VA_23060_M57616-59681

that house would go for $1.5 million US easy over here

[Hugh_Janus]

Minz, they used the term 'detached' quite a bit...


Over here we have apartments (attached) condominiums (attached) and houses :lol:


do you guys have a lot of attached houses or something?

detached house = house on its own
semi detached house = apair of houses stuck together
terraced house, a row of houses stuck together
flat = appartment

[minz]

Minz, they used the term 'detached' quite a bit...


Over here we have apartments (attached) condominiums (attached) and houses :lol:


do you guys have a lot of attached houses or something?

It's green belt land so building is VERY limited, it's also a pretty affluent area, I sold a 3 bedroom detached house with a fair bit of land some ten miles away from here and bought a 2 bed flat/apartment here and it increased my mortgage by 50K. :wha:

[Teh One Who Knocks]

http://www.denverrealestate.com/property/15379027/14010-EAST-Detroit-DR-Thornton-CO-80602

$453K in my area of the suburbs of Denver

[Teh One Who Knocks]

http://www.denverrealestate.com/property/15379039/2546-EAST-142nd-PL-Thornton-CO-80602

And $475K

[Muddy]

that house would go for $1.5 million US easy over here

We have a lot of space... They can only jack you up in highly sought after areas around here..

[Hal-9000]

I was looking at a nice cardboard box/mat setup downtown...they only wanted 200k :lol:

[Godfather]

Well that's ridiculous.. I cant believe there arent affordable homes in your area.. You cant tell me your parents house is worth 900k..

My parent's house is a little over a million and it's an average place in this neighborhood:
https://maps.google.ca/maps?oe=utf-8&client=firefox-a&q=hamber+place+north+vancouver&ie=UTF-8&hq=&hnear=0x54867a431a38db6f:0xb6a814c2ce73f37,Hamber+ Pl,+North+Vancouver,+BC&gl=ca&ei=gX7ZT_qyBMa22gXM56zLBg&ved=0CAwQ8gEwAA

The scary thing is, North Vancouver isn't even as bloated as central Vancouver is. I've heard dozens of stories of Asian businessmen or tourists coming here, going "this is a nice place and my friends all own around here" and buying a $5 million dollar house just because they have more money than they know what to do with. One guy from Hong Kong bought 10 units in the Olympic Village from the 2010 Olympics, because hey, $1 million each sounds fair...

[Godfather]

Here's a link..

http://www.realtor.com/realestateandhomes-search/23060

Heres 469k for you..

http://www.realtor.com/realestateandhomes-detail/5600-Olde-Hartley-Way_Glen-Allen_VA_23060_M57616-59681

$500k in Vancouver :lol:
http://www.realtor.ca/propertyDetails.aspx?propertyId=11721043&PidKey=-243456662


This little beaut can be yours for $1 million... mind you, I wouldn't take a dump in this house...
http://www.realestatevalley.ca/listing/v915612-867-e-10th-av-vancouver-bc-v5t-2a9/


Most people like my parents, who bought here 15+ years ago, essentially won the real estate lottery. People who weren't daring enough then and rented or bought Condos kick themselves. Now homeowners can sell and move to a smaller city in BC and very comfortably :lol: And that's the only smart option for young families.