First off, I don’t think we are talking about blame as much as taking responsibility for one’s actions. Blame implies that someone did something “wrong” and I don’t think the consumer did anything wrong, he/she just didn’t use good judgment.
And I don’t think the institution of home ownership should be questioned per se, but how you perceive it. Is it an investment or a place to raise a family and put down some roots (or both) and maybe get some tax breaks in the process?
I know a lot of younger homeowners in their 30s and 40s, who are highly intelligent, and make a great living. They are also highly leveraged because the glam of bigger and better got the best of them (they knew exactly what they were doing), and now they are stuck with way more house and (soon to be) much larger payments than they need.
My brother and sister-in-law, both high earners in their early 40s, live in a multi-million dollar home, vacation more than they work and go through money like crazy (designer labels and all, for them and their children). And so do all their friends, each one trying to outdo the other. It’s like a Hollywood premier when you go to a get together at their house. I see this everywhere. It’s just so cool to be cool.
Honestly, I don’t think equating age to ignorance regarding risk has a whole lot to do with it. You don’t have to experience a down market to know that it is always part of the equation. Folks in their 30s and 40s are certainly mature enough to understand risk/reward and notice when greed clouds their judgment. (What about all the younger posters on this site? They see what’s going down and are staying out until it blows over or blows up).
I am constantly amazed at the sophistication level of the internet generation (they have so much more information so much faster). But again, humans will be humans and when the action gets fast and furious, people want in for fear of “missing out” which is just soooo uncool.
It’s a national state of mind that has moved us from funny money in the stock market (hard lesson # 1) to easy money in real estate (hard lesson # 2). Everyone wants to get rich quick and after the dotcom bust, real estate was the next best thing (now it looks to me like commodities is the next best thing…)
I know a lot of relatively wealthy people and none of them “got rich quick,” even some of the dotcommers that survived that shakeout. Building real wealth takes time, sacrifice, patience and prudent decision making, (plus a lot of luck). Not a celebrity mentality of I’m hot, I drive a Mercedes and therefore I’m going to be rich.
You watch, as soon as this asset class really starts to tank, the stock market will take off like crazy (unless this mess truly snowballs into a national disaster, drags us into a recession/depression of unimaginable proportions, then all markets will be hurting).
Sometimes, I look at the pictures of the Great Depression, with the long lines of out of work Americans and I shudder to think that it could happen again.
