Poverty Migrates to Suburbia

Poverty migrates to suburbia tells us that homes across the suburban landscape are now filled with people who are living below the poverty level. How can our economy be stabilizing, much less growing with a full one-third of households being at or below the poverty level?

We tend to think of the suburbs as middle class utopias.  When people think of the American Dream they usually draw up a picture of a home with a picket white fence in the suburb.  Poverty is usually left to inner cities and crammed multi-family dwellings.  So it might come as a surprise that over the last decade the fastest growing segment of poverty occurred in the suburbs.  It occurred in this market as people were driven out of city centers where prices surged and people were driven further outside of the city.  In the past, this push out was usually done by choice for quality of life and family purposes.  This time, it has happened by economic force and poverty in the suburbs is exploding.  This goes hand in hand with the shrinking middle class. Source

This begs the question, who is buying all the houses, across the country, where is the funding coming from and how will it be possible for people to pay for these homes? According to the Bureau of Labor Statistics, the monthly (un)employment report, manufacturing jobs are down, good paying white collar jobs are down which leaves only service and retail jobs. I don’t know anyone that can buy a house working in a call center or at a retail outlet. These jobs were never intended to be high-paying “careers”, they have always been for the purpose of employing recent college grads, until they can move on their chosen career, or people as a second job for people who needed to generate extra income for a short period of time – not a career. This has all changed, as Trump has rightly been pointing out, the ravages of NAFTA and other trade deals signed by the federal government to benefit the 0.01% and the corporations they own.

Big investors have invested a large sum of money into the housing market over the last decade causing housing prices to go up while regular buyers are priced out.  The trend is happening nationwide:

“(NBC) Seattle, like many cities, has had a boom in housing costs. Many in the tech industry are looking for homes in the city to be closer to jobs and to shorten commutes. Housing prices in the city rose an exorbitant 53 percent in the last four years, according to S&P Case-Shiller Index.

Other cities, including Denver, Dallas, and Minneapolis have seen similar increases in housing costs.” Source

As Dave Kranzler, Investment Research Dynamics, has pointed, on numerous occasions during our Shadow of Truth podcast, the housing market is dependent on people moving up the ladder. A person who is established and wants to move, either to a larger home or downsize to a smaller home, that creates the bulk of inventory in the housing market. People buying all these new homes are broke, or soon will be due to the fact that our current economy is nothing more than an illusion. The housing market is set up for another massive wave of foreclosures or abandoned homes.

With 53% inflation over the past four years and the quality of jobs, and pay, in decline it only makes sense that people living in the suburbs are going broke. This recipe for disaster is playing out in real time with real lives. Yes, people get all excited about their home increasing in price and what they can sell it for, however, the reality of the situation is that is nothing more than inflation. When a person looks at this 53% increase in home prices for what it truly is, the excitement is usually mitigated. Who wants to live with 53% inflation over four years?

If you’re in a position to wait for this latest bubble to burst, the sheer volume of homes that will come to market, in my opinion, will dwarf the inventory between 2008-2010. What happened where I live is home prices did not decline, but they did stabilize. Inventory increased and people that were in a position to make a move were able to take advantage of the situation. This may be a way for others to make a play if moving is on the agenda. We are simply waiting for the inventory to increase and prices to stabilize, or come down, and then we will make our move. In the meantime, just know that we now have urban areas filled with broke, confused and unemployed people and it sounds like the suburbs are moving in that same direction.


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The Daily Coin

Rory Hall, The Daily Coin and Gospel News Network. Beginning in 1987 Rory has written over 1,400 articles and produced more than 500 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Gold Seek, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Dr. Warren Coates and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Gospel News Network to enjoy some of the best economic, precious metals, geopolitical and preparedness news from around the world.