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Home >"The American Dream Is Dead For Everyone But A Happy Few"
" The American Dream Is Dead For Everyone
But A Happy Few"
By Tyler Durden
Created 05/05/2014 - 19:49
[1]
Submitted by Tyler Durden [1] on 05/05/2014 19:49 -0400
Florida [2] Real estate [3] Reality [4] recovery [5]
Tweet 129

$250 Million homes in Europe, $150 Million homes in the US, and as Bloomberg notes [6] Million-
dollar homes in the U.S. are selling at double their historical average while middle-class property
demand stumbles, showing that the housing recovery is mirroring Americas wealth divide.
As CoreLogic notes, "the real estate market is the ultimate reflection of confidence, wealth and
income," as purchases costing $1 million or more rose 7.8% in March, while sales of homes
costing less than $250k plunged 12%, as "the same factors driving the income stagnation in the
middle are driving the income momentum at the top." The luxury markets are indeed on fire as
foreign (and domestic) super-wealth floods into real estate but as NewEdge's van Batenburg
notes, echoing ur very words, "The American Dream is dead for everybody but the happy
few who have enjoyed the tailwinds of the appreciating stock market."

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[7]

As Bloomberg reports, [6]million-dollar homes in the U.S. are selling at double their historical
average while middle-class property demand stumbles, showing that the housing recovery is
mirroring Americas wealth divide.
And here's the thinking that is driving that...
Purchases costing $1 million or more rose 7.8 percent in March from a year
earlier, according to data released last week by the National Association of
Realtors. Transactions for $250,000 or less, which represent almost
two-thirds of the market, plunged 12 percent in the period as house hunters
found few available homes in that price range.

...

The real estate market is the ultimate reflection of confidence, wealth and
income, said Sam Khater, deputy chief economist at Irvine, California-based
CoreLogic Inc. The same factors driving the income stagnation in the
middle are driving the income momentum at the top.
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But it isn't all shits and giggles in reality... as U.S. home prices climbed 12.9% in the year through
February and wages rose only for the top U.S. earners and fell for the bottom 90 percent,
Gary Wasserman, CEO of Troy, Michigan-based Allied Metals Corp., is
considering selling two homes in Florida -- one in Naples and another in
Miami Beach -- to take advantage of rising prices in the area. Hes also buying a
5,000-square-foot (465-square-meter) condominium in a project under
construction in Miamis Coconut Grove section.

...

The stock market is very strong and this is a way to monetize and
concretize some gains, said Wasserman, 64. We had quite a shock to our
collective confidence in 2008 and 2009. The resurgence of the economy has
underscored for us that this country remains a very strong place and that
the future remains strong.
With the mortgage headwinds and the lack of job growth and everything else
that we dealt with through this housing cycle and now into the recovery, the
typical first-time buyer got kneecapped, Jeff Mezger, CEO of the Los
Angeles-based company, said on a conference call in March. So there is no
demand there, and we found a way to go flex up and change product and move
as quickly as we could to where the demand was.

...

First-time homebuyers are paying retail price, investors are getting
wholesale pricing,

...

The American Dream is dead for everybody but the happy few who have
enjoyed the tailwinds of the appreciating stock market, said Robbert van
Batenburg, director of market strategy at New York-based Newedge, a
multi-asset broker-dealer that published a note to clients last month on the
"The American Dream Is Dead For Everyone But A Happy Few" http://www.zerohedge.com/print/488101
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The bottom line is that unless you made a fortune in unrealized wealth in stocks over the past
few years, you are now priced out of buying a home... and even those with gains are 'rotating'
into the real estate market lifting the dream further away and on more and more fragile stilts...

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Source URL: http://www.zerohedge.com/news/2014-05-05/american-dream-dead-everyone-happy-few
Links:
[1] http://www.zerohedge.com/users/tyler-durden
[2] http://www.zerohedge.com/taxonomy_vtn/term/9467
[3] http://www.zerohedge.com/taxonomy_vtn/term/12115
[4] http://www.zerohedge.com/taxonomy_vtn/term/12218
[5] http://www.zerohedge.com/taxonomy_vtn/term/11361
[6] http://www.bloomberg.com/news/2014-05-02/luxury-home-sales-jump-as-low-end-falters-in-u-s-rebound.html
unequal housing recovery. On the low end, home sales are still making fresh
lows every single month.
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