Things look bleak for American homeowners, and not only for those with subprime and adjustable-rate mortgages. Market analysis shows that American house prices have fallen a 4.5% during the last quarter. A Yale University economist expects prices to fall a further 5%. Even worse: he does exclude a further decline up to 50%.
Recent evolutions have come as a shock for many homeowners. Some of them have found solace in virtual reality. Realius developed a game that allows players to guess the price of houses on the market. ( www.realius.com) American homeowners can use some escapism these days. The current crash of house prices contradicts popular American wisdom that house prices in America do not fall.
As the chart indicates house prices witnessed a previous slump in 1991. But soon afterwards prices started to climb again steadily. However, there is no guarantee whatsoever that the current crises will evolve in a similar rebounce.
I believe it can be considered as ‘American’ to create a game out of similar painful, economical situation. One can consider it as a nice practical joke to make a game based on so much personal misery. On the other side, it also puts a finger on a very delicate topic for such a broad segment of the population.
Next to that, Americas habit of the past decades to live on borrowed money was always to come back one day. Few, however, expected such a large fallout with so many people involved.
Sarah Struyf
http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348876&story_id=10225023
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