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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (6886)	11/17/2002 1:37:10 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

You'd have to write to John Scowcroft to see what his definitions are. But I suspect I know the answer and it would make him seem ridiculous to most. Tradtional measures of family net-worth exclude the value of a families home, just as it excludes the value of their furniture and other chattel. These peculiar measures often exclude acquisition debt for the home (the original mortgage) but include debt added later such as a home equity loan. One can easily see how such a peculiar system of accounting could show the median net-worth of 55 to 65 year olds is a negative $173k. Some will explain with great gravity and bombast how profound and clever this method of accounting is but, to most, this makes as much sense as counting margin debt but excluding the value of the stocks and bonds in a net-worth counting. To be certain you'll have to ask the referenced wizard for his terms and definitions.

To: GraceZ who wrote (6886)	11/17/2002 5:39:02 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

OK, median, not average. i agree this makes it sound worse. however, if you consider the source, i don't think they just made it up. i think it is probably a question of definition. as Elroy said, they are probably not including the value of primary residences, but are probably tacking on mortgage debt. otherwise, there is no way 50% of this group, or nearly 5 million people, could be in debt such a large amount. Most people are never allowed to borrow $173K in excess of the asset side. even in the best of times. unsecured lines of credit from banks are pretty rare for average consumers. although most do not need them given how many alternate sources of credit the bubble has provided.