The future real estate crisis

We have been in a "Real Estate Crisis" for a few years now.  We have all grown weary of the stories in the news relating to the various aspects of this crisis.  Stories of those who were pushed into risky mortgages they could not afford.  Stories of those who are "underwater" on their mortgages.   Stories of those who have lost their homes to foreclosure.  And stories of neighborhoods where there are lots of empty houses bringing the values of everyone else's houses down.

These are all gloomy realities.  And there are more gloomy realities.  The rise in the average square footage of American homes during decades where the average family size was falling and real middle class wages were stagnant at best, along with the rising bubble of real estate values, and the extraction of that value to fund an unrealistic rise in personal and family lifestyle set up the Real Estate Crisis.  The gloomy reality is that the higher you go the farther you have to fall.  And that fall, as we have seen by the bursting of the real estate bubble, has put us so low that recovery has been nearly non-existent.

There has been a push by some to forgive some of the debt by changing the terms of the mortgages, revaluating the properties, or otherwise making it possible for those who are at risk of losing their homes to keep them.  There are many reasons that this would be a good thing for not only the home owners, but for the overall economy.  That said, I can not help but see the bigger picture and that picture has a problem that will be with us for a longer time than the current crisis.

Owning your own home has been seen as part of the American Dream.  Home ownership has its responsibilities.  Paying the mortgage is only one of them.  Paying taxes and insurance are also a necessity.  But the problem I see, that does not get talked about in the stories of the Real Estate Crisis, is that of home maintenance.

Maintaining a house and property costs money.  As anyone who has owned a home knows, there always seems to be something that needs to be maintained, fixed, or replaced.  This could be something like a water heater, furnace, flooring, roof, plumbing, paint, you name it.  Some of these things must be done when they need to be done.  If your water heater breaks down, you will fix or replace it as needed.  But some other things, and these are the things that I believe will build into the next crisis, are less urgent and thus can and will be delayed beyond prudence, and will not only end up costing more in the long run (think failure to replace a roof that badly needs replacing and having damaging leaks) but will create a system-wide real estate quality degradation that given our difficult financial times will become a new, possibly worse, Real Estate Crisis.