Given current real estate prices, the American dream is over. When I was a kid in the 90s, my parents bought their first house for about $35,000. That’s about $84,000 today. That’s a lot of change, but what can you really buy with that in today’s market? A nice car, maybe? A bachelor’s degree? That’s certainly not enough for a house. In Utah, that costs about half a million.
So let’s compare. What can you do with half a million in today’s market? That’s enough to start pretty much any business you can imagine, including a year’s worth of store or office rent, a company truck, and first year’s salary for one or two employees, plus your own. With a solid business plan and a little effort, anyone should be able to turn a profit on $500,000.
That’s the problem with the housing market. Home prices have outpaced inflation by so much that their average price is about the same as that of a small business. Why would someone put that much money into a home? Why would they take on that much liability if it wasn’t worth the risk? Life goes on, and every American who isn’t immensely wealthy is one medical emergency away from losing everything. If you buy a home, you’d lose the bank half a million dollars and your credit would be ruined. But if you buy an LLC, you’d be safe even if it went bust.
Stephen Atkin, West Valley City
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