One of the core indicators of a vibrant middle class is home sales within 100K dollar value to 500K dollar value. Since the 2008 Republican Great Recession home sales and ultimately the value of homes have been on a relative decline. The value of homes increase when housing is “scarce” for example, there are more buyers than supply of homes. The opposite happens when there are foreclosures in a location. There are other factors, but this is a basic driver of home values. The silver lining in this though is that the very, very wealthy are buying homes.
According to the National Association of Realtors, Real Estate sales of homes valued at one million dollars or more are being sold 11% higher than last year across the United States and homes that are 0-100 thousand dollars are being sold at a rate of 2% more than last year. This last statistic is real estate investors grabbing under water, short sales or foreclosed property and re-selling them for profit, not actual sales to families.
The price points that are doing completely terrible are middle price points, basically the homes that the working class to upper middle class families purchases. Homes valued at 100K to 250K dollar, those sales are down 23%, homes valued at 250K-500K, those sales are down 22% and finally home sales valued at 500K-750k are down 10%.
Look at this correlation between the percentages and the price points, the higher the value, the less “trouble” the housing market is in or in the case of million dollar plus homes, there is a huge increase over last year. This is one sign out of many that the United States’ income inequality has increased and we are becoming more and more of a plutonomy. A plutonomy is when the wealthy essentially control the entire economy, all economic demand is being driven by the very rich. In a plutonomy there is no need to sell to the middle class if they do not have money, which means demand is relatively low and doesn’t create as many jobs. Really, what has happened is the wealthy can only consume so much, the rest of their discretionary income is hidden in off shore bank accounts, invested in other countries or Swiss bank accounts. This doesn’t create the demand needed to jump start the economy and get American back to work. The wealthy have the majority of the money just like back in the days of the aristocrats, where generational wealth was the norm.
The very wealthy in this country are doing very well. In fact, as many within the middle class have felt economic pressures and squeezed by high gas prices, the rich have never been richer and obviously feel comfortable and insulated from the everyday economic issues the rest of us face. Wealth and income in the country is fairly well concentrated into a few hands at the top and these million dollar homes sales are the indicators.
Instead of focusing on jobs and wages of the middle, working class, the Republicans in the states and in Washington D.C would rather draft and pass bills that focused on social issues like gay marriage and abortion and voter I.D. bills that make it harder for the elderly, the minority and students to participate in elections. The priorities of the Republican Party are NOT the priorities of most Americans.
We need leadership that is going to focus on getting America back to work. In November the country made a terrible mistake electing ideologues that force a marginal agenda down the throats of the American people. The average voter was upset and agitated with the slow growth of the economy. They elected anyone that reflected their anger, but all they received in return were politicians looking to regress this country back to the days of the 1920s.
When the Tea Party candidates said we want to take our country back, the American people didn’t mean backwards. Now it’s time to take our country forward.