In Underwater: How Our American Dream of Homeownership Became a Nightmare, Ryan Dezember exposes the corruption that led up to the 2007/2008 housing crisis. Dezember experienced the crisis firsthand as a new homeowner before the crash. Like so many Americans, his Alabama home went “underwater”, that is, it was worth less than the balance remaining on his mortgage. Dezember was also a real-estate journalist, so he was familiar with many of the big names in the industry.
This book is packed with information, and I was genuinely impressed by Dezember’s vast knowledge of the industry. Unfortunately, I found this book very hard to follow because I am not versed in the language of real-estate. I only have a vague understanding of mortgages, bonds, and house-flipping. I wish that Dezember had introduced these concepts to us before explaining how they operated in the years leading up to the housing crisis. If you are an economist or are familiar with real-estate, I’m sure you will get a lot out of this book, but I was constantly Googling things to make sense of what Dezember was describing.
I did, however, take away a few key elements from the book. Real-estate developers bought and sold expensive property even before it was built. Speculators made a lot without risking their own money. Furthermore, banks gave loans to people who had no business owning homes. House and condominium-flipping worked as long as housing prices were high and the market was hot. As soon as housing prices dropped, owners were stuck with property that they couldn’t sell and was beginning to accrue high interest.
Unfortunately, I cannot recommend this book to people with little knowledge of economics or real-estate. I read nonfiction to learn more about the world, but after reading Underwater, I still can’t explain the steps leading up to the housing crisis.
It pains me to give this books such a negative review because I know that my ignorance is largely responsible for not appreciating it.
Underwater came out on July 14 and is published by Thomas Dunne Books. I received this book from NetGalley in exchange for a free and honest review.