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

To: bentway who wrote (45832)	10/18/2011 10:52:12 AM
From: Mike Johnston	1 Recommendation Read Replies (2) \| Respond to of 119361

Well, in 2002 I sold my house in Oceanside, CA for five times it's (nearly completely unpaid) mortgage value! It DEFINITELY created "new wealth" for ME! No net new wealth has been created. The wealth has simply been transferred from the buyer to the seller (you). Your profit on the deal was the loss of the purchaser. Your increased spending power after closing the sale was equal to reduced future spending power of the purchaser as he had to put in much more cash or accept a heavy debt load to complete the transaction than if the price of the house stayed always the same. Hence, in aggregate, no new wealth has been created. So simple but Greenf*** did not understand it. -g-