Tuesday, September 20, 2011

The United States of America: Now up to 70% off!

If you want to see some timely evidence of the sad state of the American economy, look no further than today's Ottawa edition of Metro:

Click to enlarge and read
This unimaginatively art directed full-page ad, by "Canada's only U.S. real estate expert" Steve Martel, promises fabulous discounts on foreclosed properties. "You can buy a $35,000 home and sell it for $1000+ or rent it for $900/m like I do!"

Profiteering from our neighbours' misery aside, there is an obvious flaw in this hype. If you buy a house for $35K, you own a $35K house. That is, unless you can magically transport the house to a better market, or magically fix the local economy. The banks may be pricing to sell, but these foreclosure sales weigh down the rest of the market.

The big irony to me, though, is that using real estate as a get rick quick scheme is what put the American economy in the toilet to begin with. I don't think we really need that kind of speculation fever up here—particularly when it concerns the very same properties that ruined the lives of so many economically ambitious Americans.

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