What the Media Economists are missing in my opinion.

I have listened to and read many reports on the current housing market across the United States, and the one thing that I see they’re missing is they are treating housing like a stock certificate.  I understand how mortgages are sold and the secondary market, which is in shambles.  The one thing that the media experts fail to see is the need for housing.

Food, Clothing and Shelter are humans’ basic needs.  Stock in companies while extremely important in helping to provide the three basic needs, do not quite measure up as a need.  Shelter, i.e. housing is one of those needs.  I read an article on MSN over a week ago about how bad the current rise in housing sales may actually be bad for the economy in the long run.  

I thought anything generating income was good for the economy.  Maybe I am being overly simplistic in my thinking, but I could swear that was one of the key things in my Econ classes.  The thing that caused me to have issue other than the doom and gloom tone of the entire article is that the housing bubble was directly compared to the dot com bubble of a few years ago.  

While I don’t disagree that housing and the dot com bubble were helped along by investors.  The fact is, even though we may not like it, we can survive without the internet.  It would suck as my teenager would put it, but none the less we could actually survive.  People seemed to have done it for thousands of years.  The thing that they had to have was housing of some sort.  We know this because dwellings and other ruins have been unearthed as the most direct evidence of the existence of ancient peoples.  

Their shelters in some instances, were pretty crude as compared to our current standard of living.  They did exist, however, and even here in my home state of Utah, we have many examples that built dwellings and existed here.  What we don’t know is if they had stock in any corporations, if they did, there is no proof, no writtings nor any left over residue showing that in fact, they did.

Unless books or some other writings survive, in a thousand years there won’t be any proof that we had things like stocks and bonds.  They may still have the current economic model that far in the future, I don’t know.  Whether they will have some sort of super computer can be debated somewhere and by someone else.  What I do know is that they will have shelter of some sort.  Whether any of our current housing structures will stand that test of time, is also debatable, but there will evidence of foundations and basements left.

What I have taken several paragraphs to get to is that housing is a tangible thing, it is a need, not a want.  Housing is something more than just an investment.  Whether you are buying your own home or property to use as a rental, someone will need to have a place to live.  Looking at the housing market solely as an investment is looking at just a portion of the market.