Research: Housing Busts and Household Mobility
Submitted by
CalculatedRisk on Tue, 10/14/2008 - 8:01am (100 comments)
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emo?
marin? dory?
Oops...marlin?
EHP: And we are taking equity stakes in each and every one of these banks?
Exactly like I predicted in 2006:
...By my estimate $2.5T in MEW is unsupported by reasonable asset valuation. In total somewhere between $7T and $9T in phantom equity is exposed in any retracement to the mean. An orderly retreat will allow inflation to eat away much of this. A decline in the dollar may result in a disproportionate amount of pain to be taken by foreign investors. No matter how the pain is spread, there will be consumer pain. Likewise because of govt spending policies that resemble the proverbial cricket in summer we can expect massive deficits and even larger tax inceases. I hope everyone likes their neighbors because nobody is moving for a very long time. The new immobility class has moved in to stay.
The rest is at: Exurban Nation: Inflection Point
Yet another reason that the homebuilders will go into hibernation for several years. Most dying from a lack of stored fat (money) to last the prolonged winter. Too bad they ate all their honey pots by July.
They couldn't pay me enough to own a house today.
Has anyone added up how much debt the feds are implicitly and explicitly guaranteeing?
Between the federal debt, GSE debt, money market debt, interbank lending, too big to fail banks and other industries, and I suspect soon the list will include state governments.
Even if total debt declines by half, if the half that is left is government guaranteed we will still get hyperinflation.
The ironic thing is Detroit, the once-proud car manufacturing hub, is the most immobile of all.
Ahh to be debt free....
Me and longtime friend that does rmcr's for mortgage industry discussed this last night...He's closing shop 50% less business, I'm thinking of closing shop..Auto is dead and will not come back for a long time...
We had a toast to being mobile...
Perfect thread music..
The Who- going mobile
YouTube -
Just met a new neighbor. Living in a mid range OC apt. complex and renting his house further north in the county. Says he couldn't sell due to the market. Methinks he couldn't sell due to negative equity.
I actually felt bad for him and his family. I'm rethinking schadenfreude.
Having emotions is creepy.
Good thing there aren't any employers trying to fill jobs, otherwise this would be a real problem.
hurricane ike costs 11billion in texas alone.
wildfires in ca. over 11k acres
va "fire season" starts tomorrow.
i think we had better start looking around us,our attention is on this and there might be other things we need to look at. pickpocteters at work be a lert
Could the events of the last few weeks cause such a worsening of public sentiment as to acutely reduce the supply of knife catchers.
I think it's possible for housing prices to start a steeper leg down as the result.
There were a lot of people who believed that the declines in housing would not spill over into the general economy and that prices would stabilize next year as a result of GSE nationalization.
I think those beliefs may have been shattered over the past few weeks.
Mykillk:
W said the gov will take equity positions in the "strongest banks". Good idea for an individual investor, but are these the banks that NEED gov help? Shouldn't the gov help go to the banks that would fail without it? WTF am I missing?
Are we now serfs tied to the land like in Czarist Russia?
I don't buy it. Look how many Okies moved to Cali
I believe the only fair thing is for the Government to guarantee these houses, so that people can move to better jobs without being "penalized" by lower house prices.
Actually, what will happen is corporations will find a way to make this a part of the hiring package, and find a way to write off the loss in taxes while raising prices.
CR, Do you think Mobile, Alabama will change its name to Immobile, Alabama to better reflect the times?
This is why I sold my house in '07 and have never been happier.
I am renting a nice house now in a great neighborhood and my rental costs are a full 50% less than what it would cost me to buy this pig today with 20% down and all.
But what I like the most is that if need be....I can throw my keys on the kitchen counter and be gone without a seconds thought.
Flexibility and mobility are going to be very important over the next decade IMO.
I'd like to see an overlay of housing immobility on the average length of job tenure. Our kid is in high tech with a rapid volatility of job turnover. We keep asking her why she thinks she wants to buy a house, as we see that she won't be in one place long enough to burn off the points, fees, taxes, maintenance, etc., even in a rosy scenario of no negative equity accrual.
What happens to all the bankers on Wall Street or the Computer engineers in SiliCON Valley? Million dollar homes and no jobs...I don't feel sorry for them.
This is another reason to welcome for a quick, sharp drop in housing in areas where prices still greatly exceed historical valuations.
My guess is there is a window of negative equity--say, from 5-20%--where the owners will "stick it out". If prices decline slowly, a larger proportion of households will find themselves in this window of tolerance.
If prices decline abruptly, most adversely impacted houesholds would exceed the window and default/walk away, avoiding this "mobility trap".
Flexibility and mobility are going to be very important over the next decade IMO.
Mr. T.
Spoken like a true prostitute.
CR, I'm sure the crop of day traders who have moved in here are wondering why anyone would care about that (mobility).
A definite yes with this argument. Anecdotally, seeing this among the managers here at Initech (a division of the Nakatomi Corporation). There are people that are movers/shakers that are now stuck because they bought in 2005-2006. They had plans to move (up) but now have to wait to get back above water.
CR, are you sure that corporate transfers are a net gain to the economy? Always seemed like a bunch of churn to me...
Seriously, I think this concern is a little overblown. Most companies hiring higher-level positions will provide relo packages that often include home purchasing arrangements.
Not only that, but those who anticipate such career moves are more likely to maintain a larger home equity cushion.
Some company in Arizona converts shipping containers into affordable homes.
I'm moving up the ladder, screw this economy!
The Jeffersons Theme Song
YouTube -
Also see: A Credit Bubble of Historic Proportions
Jesse's Café Américain
"What is crooked cannot be made straight, and what is lacking cannot be counted." Ecclesiastes
Hmmm, let's see. How about injecting billions of capital in the banks crippled by reckless speculation and fraudulent lending, and obscenely high pay and bonuses to the people who ran them.
And then we can beg the banks to start making loans to us with our money to get the credit expansion back on the upswing.
That should fix the problem, right?
CR - don't forget that large companies pay for employee moves and they will eat up the equity.
"Spoken like a true prostitute."
And said without an ounce of shame.
I feel bad for people trapped in a house....must not be a very good feeling at all.
Cant hire my 4 vacancies here in DC burbs cause of the move no one can buy or out of towners cant sell...
"Some company in Arizona converts shipping containers into affordable homes."
That's where most of the day traders will be living three years from now, if they're really lucky.
"Most companies hiring higher-level positions will provide relo packages that often include home purchasing arrangements."
So, they won't hiring people from CA anymore. Is that your point?
I Sat down at a Monopoly game last night. The big winner started going crazy half way during the game, did stupid things, and lost all his money. He cried to his wife and she promptly brought him ALL the cash from ten more Monopoly games.
The other players stared dumfounded as he paid off all his debts and quickly recapitalized. He then started buying the best properties from the others, who scrambled around franticly looking for cash from more Monopoly games.
There was one poor guy, who refused to do this because he considered it unethical. He was wiped out immediately. The game became an obvious farce.
Anecdotally, I've heard that companies are suspending such programs because of the losses associated with them.
A (upper level) friend of mine is stuck because his company cancelled the program. He's in MA.
Seriously, I think this concern is a little overblown.
I think there's some nuance here we're missing. Obviously foreclosures will not lead to decreased mobility; homeowner bailouts will. Therein lies the problem for policy makers: homeowner bailouts leading to decreased mobility could actually be worse for the economy in the long run than the foreclosures themselves.
Unintended consequences abound.
Anonymous:
Shipping containers to homes. Not a bad idea. I know of an architect in Chicago who is trying something similar.
We buy so much from China and we send so little back that it is cheaper to scrap out the containers here than to pay demurage on the ship while we reload the empty containers. Turns out the steel sides and top are valuable, but the real value is in the hard wood deck which is remanufactured into flooring in this country.
Cant hire my 4 vacancies here in DC burbs cause of the move no one can buy or out of towners cant sell...
3 O'clock bounce | 10.14.08 - 1:06 pm | #
What is the term of these jobs?
You could put them in rental properties, and they could rent out their houses.
Employers reimbursing for housing losses will not continue. And the vast majority of workers are making 50K or less.
They are not getting any "relocation assistance" offers.
mp,
For day traders, this news means short moving companies and quality of life.
Anonymous writes:
I Sat down at a Monopoly game last night
LMFAO!! Great post!
Elvis, yeah, but your joke would work better if Mobile was in California or Florida! I don't think Alabama had much of a bubble.
mp, I've spent more time on the market lately - for obvious reasons. I'm hoping to switch gears and write more about the economy (the recession) and housing. The Big Picture is more about stocks anyway.
Zero, I've hired some good managers from out of state after a nationwide search. It always seemed to work out well. I think it's mostly a positive.
Shnaps, companies usually are willing to eat some lost equity based on the salary. If you are trying to recruit a $100K per year person, and they are $200K underwater - it's not going to happen.
Best to all.
Dirk van Dijk writes:
Are we now serfs tied to the land like in Czarist Russia?
maybe time to relabel the "red states" to "serf states". actually, most of the purple and a bunch of the blue states as well.
This reminds me of The Fed for some reason...
Visionaries - Knights of the Magical Light
YouTube - 80s cartoon Visionaries - Knights of the Magical Light
\t"Sorcery Squared"
\tDoug Booth\tDecember 7, 1987
Cryotek is captured by the Darkling Lords, who try to remove his Totem power. Instead, he ends up with Cravex's Totem in addition to his own and starts behaving strangely as the two Totems fight for control. Learning what has happened, the Spectral Knights and Darkling Lords decide to put their differences aside until he is found and Cravex's Totem can be removed from him.
mp, after reading your thoughts last night I was very curious. It sounded like you thought that a US bankruptcy is the endgame. Are you expecting a currency collapse?
thanks CR, well reasoned as usual, and of course much more interesting than ticker watching
my take is that from what i have seen in the SF bay area, it is the middle/lower rung employees who are 'locked in'
those closer to the top of the food chain in their respective companies usually have their housing related issues sorted out on the companies dime, not their own
of course, this still means that an economic cost must be paid, but as in all things that are from a 'flypaper' situation, the costs are borne by more than just the assumed 'victim'
and of course, this is just one more example of why home ownership is not an unabated good (and i am a homeowner)
"Shipping containers to homes. Not a bad idea."
Yea, right. The supply of housing is not the problem. Adding to the supply with inferior supply is not a solution.
Is it time to open the borders to every foreigner with a college degree?
Wouldn't increased immigration (on the high end) both increase demand for housing somewhat and help solve the economic effects of this reduced worker mobility?
Greatly immigration seems like a step in the right direction for our economy that is not being discussed.
Elvis - my point is, many companies are willing to eat a real estate loss for the right hire & chaulk it up as a "hiring bonus /relo expense".
Although, I would not be surprised if some start tweaking their policies (e.g. no-go in CA, FL, NV).
People from CA don't want to relocate here anyway. We don't offer the "aspirational lifestyle" they are after.
"Are you expecting a currency collapse?"
Yes, but not immediately.
Hey mp,
Did you see this link? It may into your future?
Is the Prime Rate a Scam?
Interfluidity :: Is the Prime Rate a Scam?
Winnebago and Airstream eliminated this problem many years ago.
Kona, thx.
"My guess is there is a window of negative equity--say, from 5-20%--where the owners will "stick it out". If prices decline slowly, a larger proportion of households will find themselves in this window of tolerance."
I agree. I think the current in and out of homes adds to the social costs too. If people feel as though their time in a community is 5 years or less, they have less social investment in their community. Less reason to be involved in community fund-raising, to volunteer for community organizations etc.
I also think most children tend to thrive by being in a community through out the predominance of their school years.
The research paper gives good reasons why housing bubbles are bad for the general public and why governments shouldn't promote them.
The housing bubble
- destroys credit markets
- locks people into their houses
- sucks the money out of first-time buyers
all of which impacts the economy negatively.
anybody think President Obama will change the tax code to make moves easier?
back to work Monta
I know top-of-the-ladder type corporate employees who moved to CA in 2005 and 2006. Don't know how many other companies will be able to afford a $500k to $1M hit to lure them away. The employees are screwed unless they had a company house buyout as part of their employment contract.
Re: " It may into your future?"
See/hear: Glossolalia or speaking in tongues is the vocalizing of fluent speech-like, but unintelligible utterances..
Glossolalia - Wikipedia, the free encyclopedia
"I also think most children tend to thrive by being in a community through out the predominance of their school years.
Whereismyretirement "
Unless they get beat up every day by kids who need their lunch money.
another thread on the thread horizon has appeared...
ew thread
Unless they get beat up every day by kids who need their lunch money.
Elvis | 10.14.08 - 1:18 pm | #
Did the Fed start a new program??
Seriously, I think this concern is a little overblown. Most companies hiring higher-level positions will provide relo packages that often include home purchasing arrangements.
Not only that, but those who anticipate such career moves are more likely to maintain a larger home equity cushion.
I disagree. a lot of upwardly mobile people bought homes but were planning to move soon. remember the "throwing money away on rent" meme?
This is acutely problematic for fields such as medicine, law, and even business.
Many of the med students and residents with whom I work bought... but they are planning on moving when they finish training. In the past (bubble years) it made sense to buy if you would be in a location for 2-3 years.
a lot of the people who really get the relo packages don't move because of family issues (they're more established, have their families and friends and churches and all that)
as an Orange County Mover, I'll give you my experience in the past month....
no foreclosure homeowner in OC is using a mover....they do it themselves or leave the stuff behind....to date most of the FC activity is at the lower end of the market and these folks don't use movers as much oas the folks in the higher priced areas...
I think the Alt-A's in the higher priced areas w2ill start running into trouble next year, and, they will use movers to move the big furniture to thier rental, but they will do thier own packing and move the boxes themselves....
In the last month I have seen a few folks in $2,000,000.00 homes who have sold and are all moving to rentals as they wait for the prices to drop further....none of these folks expected to sell, but, put their home on the market to see what would happen, and, when they got an offer, they took it and will rent for 6-18 months......
the drop in the stock market cost me a frew sales as people decided to stay put or took the lowest price since they were psychologically scarred by the plummet in their portfolio....
Since Paulson said, "The sky is falling!" a few weeks ago, the volume of moving inquiuris has dropped to almost zero....if no activity increase in the next 3-4 weeks, then you can forget about an uptick in the moving market until after April 15, 2009.......
people, who are expecting to be in truoble with their loan when the loan adjusts in 2009 or 2010 are just waiting to see if the govt. is going to bail them out, too....so, they are stuck as they won't refi now since they really think they might get a better deal in another 6-12 months....
finally, on a personal note, when we purchased our home in Orange in 1991, we put almost all the cash we had down ($80,000) on a $360,00 purchase of a 2800 square foot home, which had been originally listed for $447,000.
Within a year of moving in the value of our home dropped to $267,00 because a foreclossure sold across the street... the upshot of this was, that we could not think of moving out of the area because of the huge loss we would take...our neighbors all commented that they, too, would not move...and no one did until 2 years ago when two families moved due to retirement....
I think the next few years are going to be terribly "ugly" as folks with no equity flood the post offices with "Jingle Mail" ....... if they have little skin in the game, they will be much more prone to move on, and, I really believe that "home price driven Bankruptcy" will become morally acceptable amongst the middle class.....
Going to be a cold winter.......
Has anyone added up how much debt the feds are implicitly and explicitly guaranteeing?
Between the federal debt, GSE debt, money market debt, interbank lending, too big to fail banks and other industries, and I suspect soon the list will include state governments.
Entering contracts with delicate financial institutions insuring against the default of companies representing vast sums of wealth at risk? And no forseeable ability to repay or perform on these contracts in the case of mass defaults? So basically we've solved the credit default swap program by throwing the government into the pool too?
From The Magical Internet History Machine:
Foreign investment could lift housing market
Observers say low prices, falling dollar make U.S. properties a good deal Nov. 11, 2007
Foreign investment could lift housing market - Real estate- msnbc.com
The theory goes that foreign investors step in and replace first-time home buyers who have been squeezed out of the housing market during the recent downturn. These new investors in turn allow current homeowners to sell and trade up to larger homes.
That will help restart owners moving up the housing ladder, a process that had been key to economic growth in recent years.
Some mortgage brokers are already seeing a boost in inquiries about buying property from overseas. Dan Green, a certified mortgage planning specialist and author of TheMortgageReports.com, said the number of inquiries he's received from outside the U.S. is probably five to 10 times larger than it was a year ago
Going to be a cold winter.......
Beaver
Beaver, as long as you have a wood burning stove, you should be all right.
"Ethan writes:
Mykillk:
W said the gov will take equity positions in the "strongest banks". Good idea for an individual investor, but are these the banks that NEED gov help? Shouldn't the gov help go to the banks that would fail without it? WTF am I missing?"
Maybe it's a "freedom is slavery" thing.
mp, appreciate your thoughts and agree with your conclusion. Timing remains a question, but it is impossible to predict. Given the tremendous volume of treasuries the gov't will need to sell next year, it may happen faster than any of us expect. Late '09/early '10 would be my guess.
Here's to hoping for further deleveraging so I can stock up on gold.
mp, what warning signs can we watch for with regards to a complete collapse of the USD? With gold tanking and acting so volatile, what other shelter for our wealth would you recommend?
@ Gavshire Hathaway
"Late '09/early '10 would be my guess."
Your timing looks about right from where I am sitting.
Mr. T. writes:
This is why I sold my house in '07 and have never been happier.
I am renting a nice house now in a great neighborhood and my rental costs are a full 50% less than what it would cost me to buy this pig today with 20% down and all.
But what I like the most is that if need be....I can throw my keys on the kitchen counter and be gone without a seconds thought.
Flexibility and mobility are going to be very important over the next decade IMO.
Don't you have a lease? How would you walk away from the lease contract?
The landlord would have you in court buddy
@ Merlin
It is month to month....but even if it were not......a few months worth of rent is nothing compared to having to deal with a huge loss and months of time to sell a house.
The landlord would have you in court buddy
merlin
Unless you are on a month to month, which I imagine many desperate landlords are willing to do these days.
W said the gov will take equity positions in the "strongest banks". Good idea for an individual investor, but are these the banks that NEED gov help? Shouldn't the gov help go to the banks that would fail without it? WTF am I missing?
I suppose the theory is that the strongest banks will take this $250 billion, leverage it twenty times, and eventually loan out $5 trillion dollars. If you gave this cash to the weakest banks they would just sit on it to get their balance sheets in order.
In practise there is too much friction still in the credit system to allow this money to get to consumers. The frictional elements include credit ratings, credit card limits, cultural inhibitions (some people still dont actually like to be in debt), and the declining value of housing. In a couple of weeks these clogs in the credit pipeline will become obvious and after another horrid week on Wall Street, debt forgiveness will be the order of the day.
A that point there will be a paradigm shift and people will stop worrying about savings and start charging every thing in sight.
That is funny from last year, and I imagine NAR and Yun were pumping that to realtors!
Re: But New York and Chicago are not the only locations likely to provide popular options for foreign investors. Places like Florida and California are likely to see a surge in foreign investment.
"In a market with great turmoil, (the weak dollar) is one factor supporting some key markets," Wachter said of the weakening dollar.
Wachter said markets like Miami and San Francisco, which are under pressure from the U.S. slowdown, are increasingly being supported by foreign investors.
damn it , I forgot to close italics
The whole company relocation package neglects the fact that many on the lower rungs do not and will never get such a package.
30k-5ok people who might have moved in order to set up in a better job/salary area will be stuck now. No re-lo fairy for them.
I meant 30 - 50k as in salary, not amount of people, sorry.
The landlord would have you in court buddy
merlin
sold our NYC building in 06, been renting an old brownstone on the market for 2 million (still), for a tiny, tiny fraction of the mortgage on it month to month.
long time until the Rent vs Own chart changes enough to buy in this market.
"30k-5ok people who might have moved in order to set up in a better job/salary area will be stuck now."
Will they or will they just walk away? I'd bet these are the people who are willing to go where the jobs are despite the house.
Opinion needed if you are 100k upside down on a house should you just walk away if you have nothing invested financially in the home?
Opinion needed if you are 100k upside down on a house should you just walk away if you have nothing invested financially in the home?
merlin
You are not upside down, Alice.
merlin writes:
Opinion needed if you are 100k upside down on a house should you just walk away if you have nothing invested financially in the home?
loot it and walk away. it's only gonna get worse.
Joe Sixpack snubs Sarah Palin
Joe Sixpack snubs Sarah Palin | Capitol Chronicles - Susan J. Demas - MLive.com
In this "American Idol" era, we're supposed to go for the guy we can chug a beer with or the gal we can giggle with over a skinny mocha latte.
But not this time.
Why? Been there, done that.
We've already rolled the dice on a president with a fatal allergy to intellectual curiosity, demanding only "yes" men who won't challenge his chillingly narrow view of the world. We tried likeable and down-home and wound up with war(s?) we cannot win, a $10 trillion debt and an economy that bears more than a casual resemblance to the one Herbert Hoover bequeathed to us in the 1930s.
So, ya know, we're kinda sayin' "thanks, but no thanks" to that sweet Sarah Palin.
For the first time in quite a while, I'm glad I live in South Dakota...
Around here, underwater means the sewer backed up...
i'm drooling for the new data on TIC and commercial paper, but can't find my link on when they are released. anybody got that?
alan - I'm drooling for emily.
Around here, underwater means the sewer backed up...
Out til 2010
Or the crops were taken out by drought for 3 straight years...
Corporations move senior people and pay all expenses. Buying them out of their old house is not usually seen as a big deal. Mid level folks are another matter, but they're by definition fungible (according to management theory, anyway). One could make the argument that those executives not pinched by negative equity will rise according to their superior intelligence--it didn't exactly take a genius to see this thing coming. As for the rest of us, I think staying put may help the economy, long-term. To the degree that young professionals are forced by circumstances to root down and live within their means, or even rethink priorities, and become a functioning part of their communities, it will make those communities stronger. Measuring this through standard economic modeling is tricky; you'll see a negative. But the reality may be very different, very positive.
live near the RTP in NC... we play that game where you look at plates from other cities. Common for me to see 28 plates in 24 hours. Everybody is here... wish they could buy. Agree they are mostly upper end trained, educated.
Eleanor - what is a 'plate'?
This isn't 1953 -- 'moving where the work is' doesn't mean moving from 900 sq ft. in Des Moines to 1250 sq. ft in Long Beach, it means moving from 2200 sq ft in Orange Co to 350 sq ft. in Chengdu.
A little behind, but....
Was looking for a job, and out of state was a possibility. However, most companies I talked to (HR at several banks / internet retailers / financial cos) were scaling back significantly.
At my level (manager/analyst) highest "move assistance" was about $2500.
Director level was about $5-10K.
VP up to $50K.
Above that, they would buy the old house (unless you lived in CA or FL--that required CEO chops).
They were more interested in selling lower cost of living where they were headquartered.
When you need a job or the job is a good move I think some who are underwater will walk.
Happened in the bust that took out so many S&L's in the 80's.
Good citizens when faced with very bad prospects will suffer the foreclosure stain and "move on with their lives".
An exchange like the one proposed for CDS and MBS can help. Mobility can be helped if the buyer can carry his mortgage to the new home. This should be easier if the buyer buys a REO in the new place. The location of the empty home is transferred, but for the banks, it is neutral.
Someone with contract law knowledge can tell why this cannot be done. Then again, we live in a brave new world where any and all laws seem fungible.
I don't think this is as big a deal as presented. In addition to the assistance from the company, which I have seen here in my own neighborhood
here in MA just this last June, here are two other factors:
1) Telecommuting - We have several workers in our group that work from home in a location with no local company site.
2) The senior people are more likely to be among those who purchased before 2004 with standard 30 mortgages. There will be those who are stuck but less than the 1 in 6 quoted that are under water.
3) Locations like silicon valley are likely to benefit from new jobs created as capital leaves the FIRE economy investments and returns to high tech. Workers will not need to relocate as the jobs are coming to them.
While I agree that having a mortgage larger than the market value of the home reduces that owners mobility, I wonder how much mobility moves elsewhere.
For example, renters and recent graduates tend to be more mobile than homeowners in any market. There are still plenty of each. Some of the demand for movers gets diverted to them.
Some of the demand for employees is also diverted to other geographies, particularly those which did not have a bubble. With a choice between moving a top executive from Riverside or Dallas to Chicago, if both are homeowners, the one from Riverside will be in a worse position. Either the potential employer pays a $100k+ hiring bonus to cover his negative equity, or he does something else like rent out the house at a loss every month, or save up in order to be able to sell his house. Of course, he could also accept the offer and hand the keys back to the bank. Hope he isnt looking for a new job where they care about credit history soon.
The guy from Dallas just sells his house and breaks even or makes a slight profit.
A renter says sure, when can I start?
The other place the mobility might get rearranged is the job location. Sometimes the job can move to the employees current city. Other times, an entirely new office or plant can be located nearby. Since home prices were one of the main deterrents to expansion in CA starting around 2002, dropping home prices mean more people can stay here or relocate here and be homeowners.