Let us figure out some way of not moving people out and also some way in which they can pay at least some proportion of what they owe. - Pavel
Principal reduction or cramdown. the only problem is that one person's mortgage is often financed (albeit indirectly) with someone else's pension, insurance premiums, etc.
If the marijuana industry becomes a major part of GDP, then these higher end homes will have more space for growing and obviously the higher-end people will take advantage of new tax laws that help people with extra Sq/Ft write off more "stuff", so it is possible that pot will fuel The American Dream in 2010.
Why is Hawaii doing (relatively) well? Their home prices were pretty high.
From previous thread.
Because we are special. You know, like the short little bus kids.
Actually we tend to be around a year or more behind CONUS, usually San Diego or OC.
Prices have just started to drop like stones here, and most people are still in denial.
What don't you Peep's get, Obama's Green Jobless Recovery is all about growing pot more efficiently:
In a recent video interview with Lois Romano of the Washington Post, Van Jones answered the question, “What are green jobs?” Jones, the White House Special Advisor on Green Jobs stated that the Obama administration defines green jobs as “good jobs that are good for the environment.” Van Jones defines green jobs | MNN - Mother Nature Network.
'High end' areas dropping late in the game is a typical pattern. I've been doing a holding battle with the wifey to hold off buying. But because high end areas do not cash flow... this could be interesting quick.
As JTR notes, we're in the great squish down.
I'm seeing the economic mood change quickly. People who would never bring up the economy are... as they are hurting or scared. Interesting times.
In my area if you put down 20% in 2003 on a 1$ MM property you are about even in nominal dollars or maybe a little underwater.If you did not heloc your home and are still making good money you are ok,SO FAR.
Increased foreclosures will result in higher taxes for the people that still have cash-flow. Essentially, what is left of the middle class is being pushed out of The Ownership Society. I really don't see how this will help economic growth, if fewer people contribute less revenue, i.e, the new speculator landlords will have to bear the burden of increased costs and take on greater risks. I still think we are in a liquidity trap and the only way out is to grow pot and then sell it to big pharma, who will then re-package it into pills that make everyone happy to be part of The American Dream...
its like tptb have no idea the rifraf are waking up/woke up.
of course some cannot wake up if they did it would mean that everything they believed in is all screwy and no one no one is going to save them.
the die hards are going to do just that die hard.(this is a figure of speech)
our reps know nothing about us and i really dont think they care to know anything about us.
Neil wrote;
"But because high end areas do not cash flow... this could be interesting quick."
Do you mean they don't cash flow now, or they don't cash-flow ever?
My experience is that high-end stuff can cash flow. Some beach houses in Malibu used to pull in enough just as summer rentals to pay most of the year's expenses. They probably don't at the moment, but they probably will again before this is over.
In any discussion Obama has on immigration with Mexico, I sure hope he demands reciprocity. Just in case some have to move South to find a job.
Something like the White Russians in Paris- MBAs as desk clerks at the Havana Hilton
"Let us figure out some way of not moving people out and also some way in which they can pay at least some proportion of what they owe. - Pavel
Principal reduction or cramdown. the only problem is that one person's mortgage is often financed (albeit indirectly) with someone else's pension, insurance premiums, etc."
Switching the roles of (the minority of) responsible renters and (the minority of) irresponsible homeowners should be possible over a few years, if we just get on with it.
NODs up 90% m/m. Not so good. The north shore (Evanston on up) ain't looking like the bulletproof market of old (problems on the coasts in the 90's never really made it to the burbs of chi-town). I was shocked last year to see how many SFRs had crudely drawn "for rent" signs in front. In my years of painting houses and delivering papers, I had never seen one.
I think the term "more affluent" is a little misleading. They should have gone with "less ghetto". You can so easily score a dime bag in Arlington Heights.
Hear, hear, Effective Demand. Enough of this nonsense about "saving the homeowners" and the manufactured human interest story of people being thrown out on the street. They're not being thrown out on the street. They can go rent a damn place they can afford like the rest of us shmucks. Being a homeowner is a privilege, not a right.
Excerpt from a story posted by someone on the last thread, from the NY Post. Even some of the wealthy people getting free taxpayer money to pour into housing, thanks to Barney Frank, think it's just throwing money away.
"Despite those numbers, Gluck, who in addition to Riverton also bought 16 Mitchell-Lama buildings , told The Post that the situation facing developers isn't as dire as some would believe.
Indeed, Gluck said many loans don't need a bailout because large local lenders are working with developers to prevent complexes from defaulting.
Nevertheless, Gluck, who stressed he maintains his properties, said the bill sounded like a good idea, and that real estate developers might as well collect from the government since everyone else was already getting handouts.
"As long as there is a long list of people out there with their caps in hand, why should everyone else be getting a free run?" Gluck said."
Look at this NYT headline then after puking tell me if you disagree that the #1 objective for Obamanomics, the worthless MSM, and the too greedy to fail Wall St shysters is to try and pump up great chunks of the Big Shitpile so peak real estate values of the bubble can be miraculously restored
Shnaps (profile) wrote on Thu, 8/13/2009 - 6:42 pm
reply ignore user
I think the term "more affluent" is a little misleading. They should have gone with "less ghetto". You can so easily score a dime bag in Arlington Heights.
Just sayin'.
The whole "High-end" concept is questionable is western sonoma county.Does it mean a house that sold for $1mm or more at the peak? we have lots of those.Or does it mean a well designed and well built house in a good area ? we had one multi million dollar gated community outside town where the cheapest house was $1.5MM,the most expensive $3.5MM.No Water,the wells went dry before the last home was sold.they truck in the water to flush their toilets and ask their cocktail party guests to pee on the roses.The developer did disclose the problem with the wells,no one paid attention...
The percentage you're paying is too high-priced
While you're living beyond all your means
And the man in the suit has just bought a new car
From the profit he's made on your dreams
But today you just read that the man was shot dead
By a gun that didn't make any noise
But it wasn't the bullet that laid him to rest
Was the low spark of high-heeled boys
The latest Obama/Geithner program forcing servicers to give 3 months more free shelter to deadbeats is stalling the coming flood. I have been seeing 3 month trustee sale postponements (not cancellations) galore in the past few weeks. Inventory of homes in some stage of post notice-of-sale are shooting up 10+ % /week. Lots more 75% percentile and above coming on the slaughterhouse list and no takers. Bloodbath.
pavel.chichikov (homepage, profile) wrote on Thu, 8/13/2009 - 6:33 pm
* reply
* Ignore user
One of the precious things about this country is political and social stability. You don't want to see how it can be otherwise.
Pavel,
Having spent some small amount of time in places with out those things, I agree. However surely you can see that continuing down the course we are on runs the risk of losing the consent of the governed ultimately ending up in the same place, don't you think so?
@km4 (profile) wrote on Thu, 8/13/2009 - 6:58 pm
Correction: one of most talented rock n roll, blues, JAZZ bands ever !
And no band has matched them since then...
"But where will the buyers come from in the mid-to-high end areas?
Lightbulb! We got an icon for that?
How about a 16,000 credit for move up buyers!"
Why not simply offer 99% LTV non-recourse loans from a "private" entity like Fannie Mae, with repayment guaranteed by taxpayers? It's still a free market solution, and it avoids a repetition of the financial irresponsibility of no-money-down loans at the height of the bubble. / snark
From your link: “Demand is very low,” said Ken Cambie, chief financial officer of Orient Overseas (International) Ltd., Hong Kong’s biggest container line. “We haven’t seen any restocking from the retailers in the U.S. and Europe.”
BOJ May Extend Credit Steps Into 2010, Minutes Show (Update1)
By Mayumi Otsuma
Aug. 14 (Bloomberg) -- The Bank of Japan may extend its emergency credit programs into 2010 should funding conditions fail to improve enough, minutes from last month’s policy meeting show.
The central bank extended the steps for three months until Dec. 31 at the July 14-15 gathering because some companies were still struggling to obtain credit, according to the minutes released today in Tokyo.
“Another extension might become necessary if the bank’s judgment was that the situation had not improved sufficiently,” some members said. At the same time, “further improvement in the situation would justify termination of the measures.”
Governor Masaaki Shirakawa said this week that any recovery in the economy won’t be impressive as demand may not pick up enough to sustain growth. His remarks indicated that the bank won’t hurry to stop buying corporate debt from lenders and raise the key interest rate from 0.1 percent. BOJ May Extend Credit Steps Into 2010, Minutes Show (Update2) - Bloomberg.com
But where will the buyers come from in the mid-to-high end areas?
Only way to sell McMansions is to be able to break them up into smaller apartments. Like so many of the old Victorians and townhouses were turned into multifamily dwellings rentals or later on condos.
Of course the HOAs in the gated communities will pitch a screeching bitch.
Ah the Rancho Plutocrat apartments.
@ Jonathan (profile) wrote on Thu, 8/13/2009 - 7:37 pm
You are most welcome...
In celebration of Woodstock '69 40th anniversary ( this weekend ) here's my top 5 performances at Woodstock ( not ranked because it's too difficult and very very hard to choose because virtually all the 25 bands/musicians there were terrific )
Sly & the Family Stone-Woodstock-I want to take you higher YouTube -
Maybe it’s just my imagination, but it seems to me that there was a time when it was fairly common for people who made mistakes to admit that they had done so. But these days…"
Of course, Paul is chiming in on a political issue. (Everything is an excuse for Paul to talk about politics. What else does he really talk about?) But it's interesting, because what he says could apply to the tens of millions of people who got to move into homes in return for an irresponsible promise to pay an unaffordable amount. They had no intention of paying, and aren't all ready to admit their mistake in the only way that matters - moving into rental homes. Meanwhile the lenders who irresponsibly loaned too much money for overpriced homes are not ready to admit their mistake in the only way that counts - absorbing the losses themselves, sans bailout.
But Paul wouldn't be interested in this kind of irresponsibility. It doesn't fit his bi-polar political world view.
I live in a northwest suburb of Chicago where home prices peaked at around 3 to 5 times the median family income of $197,000 two years ago. There are very few home sales in the area to really get a good read on how much lower home prices would have to go to sell, rough guess, maybe 25 to 30%. I really don't think that there are many buyers out there. Anecdotally, the local Costco's business is down, no wait at checkout counter now. My wife heard a customer ask an older women who was cooking and giving out samples of food at the local Jewel-Osco, a subsidiary of American Foods, where all the customers were and she said "you should have seen it in the morning". Had my garage door repaired by a company that has been in the business for around 60 years. The repairman said their phone stopped ringing about 8 months ago even though they are well advertised in the yellow pages, and when he drives to work, he notices some people manually opening their garages instead of getting them fixed. A couple of weeks ago, I went to the Home Depot and there was nobody there,and the clerk who has worked there since 2002 said she makes sure she's never late for work since business is so bad that she doesn't want to give them an easy excuse to let her go. At Midas, the car repair shop, the workers there said business has been steadily going down for the last year and a half, and one of them has a wife who works for the post office and is worried about her job. The local shopping mall that is well established and around 10 years old reported a year over year 22% drop in revenues, though not a lot of empty retail space yet, similarly, not a lot of for sale home signs or vacant homes yet.
I am thinking about the neighborhoods in Chicago which used to be higher end, like Garfield Park and the rows of homes along the boulevard. They all decayed, and, the last time I drove through that area, were barely lived in.
But it was an urban setting, and people lived there, and some became multi-units (like old Victorians). What will happen to the empty McMansions, which can't be multi-family units per code, and will sit rotting, empty shells? Bulldoze the fine marble entries and faux Mediterranean roofs?
Illinois = Michigan
Governors elected by Unions with special support of teachers Unions
Both passed same legislation on foreclosures.
All legislation did was slow then bulge the foreclosure rate.
Idiot media in both states reported the slow in the rate as a credit to the governors and legislatures.
The neighborhoods in Chicago which used to be higher end, like Garfield Park and the rows of homes along the boulevard. They all decayed, and, the last time I drove through that area, were barely lived in.
If you start living in your car, does that count as being "move-up buyer"?
I mean, assuming it's a nice car that you bought with a cash-out re-fi.
a think tank called the "Woodstock Institute"?
Let us figure out some way of not moving people out and also some way in which they can pay at least some proportion of what they owe. - Pavel
Principal reduction or cramdown. the only problem is that one person's mortgage is often financed (albeit indirectly) with someone else's pension, insurance premiums, etc.
If the marijuana industry becomes a major part of GDP, then these higher end homes will have more space for growing and obviously the higher-end people will take advantage of new tax laws that help people with extra Sq/Ft write off more "stuff", so it is possible that pot will fuel The American Dream in 2010.
Green shoots in caravans? Move-on buyers? Will they flock south for the winter?
C
Let us figure out some way of not moving people out and also some way in which they can pay at least some proportion of what they owe.
Why not move people out? If the bank can get more for the asset by moving the defaulters out.. why not do so?
What makes that person so special over the other person who can both pay more and showed themselves fiscally responsible?
scone
Why is Hawaii doing (relatively) well? Their home prices were pretty high.
From previous thread.
You know, like the short little bus kids.
Because we are special.
Actually we tend to be around a year or more behind CONUS, usually San Diego or OC.
Prices have just started to drop like stones here, and most people are still in denial.
What don't you Peep's get, Obama's Green Jobless Recovery is all about growing pot more efficiently:
In a recent video interview with Lois Romano of the Washington Post, Van Jones answered the question, “What are green jobs?” Jones, the White House Special Advisor on Green Jobs stated that the Obama administration defines green jobs as “good jobs that are good for the environment.”
Van Jones defines green jobs | MNN - Mother Nature Network.
If the prices fall enough, I guess it works for first-time homebuyers and investors.
In any case, expect to see tax credits for non-first time homebuyers in a year or so to address this issue.
'High end' areas dropping late in the game is a typical pattern. I've been doing a holding battle with the wifey to hold off buying. But because high end areas do not cash flow... this could be interesting quick.
As JTR notes, we're in the great squish down.
I'm seeing the economic mood change quickly. People who would never bring up the economy are... as they are hurting or scared. Interesting times.
Got Popcorn?
Neil
Woodstock never dies
Documentaries - Salon.com
Are they affiliated with Chicago-based think tank Woodstock Institute
In my area if you put down 20% in 2003 on a 1$ MM property you are about even in nominal dollars or maybe a little underwater.If you did not heloc your home and are still making good money you are ok,SO FAR.
Increased foreclosures will result in higher taxes for the people that still have cash-flow. Essentially, what is left of the middle class is being pushed out of The Ownership Society. I really don't see how this will help economic growth, if fewer people contribute less revenue, i.e, the new speculator landlords will have to bear the burden of increased costs and take on greater risks. I still think we are in a liquidity trap and the only way out is to grow pot and then sell it to big pharma, who will then re-package it into pills that make everyone happy to be part of The American Dream...
Nemo, I take Visa, Mastercard, and Kruggerands.
P.S. I restarted the server, for those experiencing that spike we just had.
its like tptb have no idea the rifraf are waking up/woke up.
of course some cannot wake up if they did it would mean that everything they believed in is all screwy and no one no one is going to save them.
the die hards are going to do just that die hard.(this is a figure of speech)
our reps know nothing about us and i really dont think they care to know anything about us.
this really isnt a
kcoop is spoiling the crap out of this bunch
but it is cool that NemoB0t has a
now.
Woodstock? I was thinking Tavistock, where the consumer was invented!
Neil wrote;
"But because high end areas do not cash flow... this could be interesting quick."
Do you mean they don't cash flow now, or they don't cash-flow ever?
My experience is that high-end stuff can cash flow. Some beach houses in Malibu used to pull in enough just as summer rentals to pay most of the year's expenses. They probably don't at the moment, but they probably will again before this is over.
In any discussion Obama has on immigration with Mexico, I sure hope he demands reciprocity. Just in case some have to move South to find a job.
Something like the White Russians in Paris- MBAs as desk clerks at the Havana Hilton
I'm never good with brain teasers. So who will buy these high-end houses?
"Just in case some have to move South to find a job."
If you need to move south to find a job, it might be better to keep going until you reached a stable country - like Panama, for example.
"Let us figure out some way of not moving people out and also some way in which they can pay at least some proportion of what they owe. - Pavel
Principal reduction or cramdown. the only problem is that one person's mortgage is often financed (albeit indirectly) with someone else's pension, insurance premiums, etc."
Switching the roles of (the minority of) responsible renters and (the minority of) irresponsible homeowners should be possible over a few years, if we just get on with it.
we will not monetize
why say you that? but he's so sweet.kcoop not the monkey
O/T for a change, looks like trans-pac shipping is still sh!tpile:
Container Lines ‘Tough’ Talks May Fail to Lift Fees, End Losses - Bloomberg.com
Dang. I'm planning a forty footer leaving Balto in October. ETA could be a toss-up.
Wonder if I can short it...
C
NODs up 90% m/m. Not so good. The north shore (Evanston on up) ain't looking like the bulletproof market of old (problems on the coasts in the 90's never really made it to the burbs of chi-town). I was shocked last year to see how many SFRs had crudely drawn "for rent" signs in front. In my years of painting houses and delivering papers, I had never seen one.
I think the term "more affluent" is a little misleading. They should have gone with "less ghetto". You can so easily score a dime bag in Arlington Heights.
Just sayin'.
Hear, hear, Effective Demand. Enough of this nonsense about "saving the homeowners" and the manufactured human interest story of people being thrown out on the street. They're not being thrown out on the street. They can go rent a damn place they can afford like the rest of us shmucks. Being a homeowner is a privilege, not a right.
Excerpt from a story posted by someone on the last thread, from the NY Post. Even some of the wealthy people getting free taxpayer money to pour into housing, thanks to Barney Frank, think it's just throwing money away.
http://www.nypost.com/seven/08132009/business/apts_to_rent__2b_184293.htm
"Despite those numbers, Gluck, who in addition to Riverton also bought 16 Mitchell-Lama buildings , told The Post that the situation facing developers isn't as dire as some would believe.
Indeed, Gluck said many loans don't need a bailout because large local lenders are working with developers to prevent complexes from defaulting.
Nevertheless, Gluck, who stressed he maintains his properties, said the bill sounded like a good idea, and that real estate developers might as well collect from the government since everyone else was already getting handouts.
"As long as there is a long list of people out there with their caps in hand, why should everyone else be getting a free run?" Gluck said."
Look at this NYT headline then after puking tell me if you disagree that the #1 objective for Obamanomics, the worthless MSM, and the too greedy to fail Wall St shysters is to try and pump up great chunks of the Big Shitpile so peak real estate values of the bubble can be miraculously restored
Budget Deal Ending Need for I.O.U.’s in California
Budget Deal Ending Need For I.O.U.'s In California - NY Times
SAN FRANCISCO — The era of i.o.u.’s is almost over in California.
America has definitely become a gigantic ponzi scheme economy !
Shnaps (profile) wrote on Thu, 8/13/2009 - 6:42 pm
reply ignore user
I think the term "more affluent" is a little misleading. They should have gone with "less ghetto". You can so easily score a dime bag in Arlington Heights.
Just sayin'.
I think you meant "more effluent"
The whole "High-end" concept is questionable is western sonoma county.Does it mean a house that sold for $1mm or more at the peak? we have lots of those.Or does it mean a well designed and well built house in a good area ? we had one multi million dollar gated community outside town where the cheapest house was $1.5MM,the most expensive $3.5MM.No Water,the wells went dry before the last home was sold.they truck in the water to flush their toilets and ask their cocktail party guests to pee on the roses.The developer did disclose the problem with the wells,no one paid attention...
The percentage you're paying is too high-priced
While you're living beyond all your means
And the man in the suit has just bought a new car
From the profit he's made on your dreams
But today you just read that the man was shot dead
By a gun that didn't make any noise
But it wasn't the bullet that laid him to rest
Was the low spark of high-heeled boys
km4-
I saw that earlier today......the picture at the sidebar just screams scumbag.
Failure is not allowed.....should have been the title of that.
Ciao
MS
sorry that was patient renter.....not km4
Ciao
MS
The latest Obama/Geithner program forcing servicers to give 3 months more free shelter to deadbeats is stalling the coming flood. I have been seeing 3 month trustee sale postponements (not cancellations) galore in the past few weeks. Inventory of homes in some stage of post notice-of-sale are shooting up 10+ % /week. Lots more 75% percentile and above coming on the slaughterhouse list and no takers. Bloodbath.
Gonna be a tsunami when the dam breaks.
@Take a name asswipe@6:54 pm
Yup one of most talented rock bands ever
YouTube - Traffic - The Low Spark Of High-Heeled Boys
You wanna check out the situation for homes at the high end in CA, try this.
But where will the buyers come from in the mid-to-high end areas?
Lightbulb! We got an icon for that?
How about a 16,000 credit for move up buyers!
Damn, I'm a genius.
Frm the pigged thread....
pavel.chichikov (homepage, profile) wrote on Thu, 8/13/2009 - 6:33 pm
* reply
* Ignore user
One of the precious things about this country is political and social stability. You don't want to see how it can be otherwise.
Pavel,
Having spent some small amount of time in places with out those things, I agree. However surely you can see that continuing down the course we are on runs the risk of losing the consent of the governed ultimately ending up in the same place, don't you think so?
Remember Arc of a Diver?
YouTube -
@km4 (profile) wrote on Thu, 8/13/2009 - 6:58 pm
Correction: one of most talented rock n roll, blues, JAZZ bands ever !
And no band has matched them since then...
Take a name.... I was just listening to that last night and thinking it would make a good rockblogging entry
"But where will the buyers come from in the mid-to-high end areas?
Lightbulb! We got an icon for that?
How about a 16,000 credit for move up buyers!"
Why not simply offer 99% LTV non-recourse loans from a "private" entity like Fannie Mae, with repayment guaranteed by taxpayers? It's still a free market solution, and it avoids a repetition of the financial irresponsibility of no-money-down loans at the height of the bubble. / snark
C,
From your link:
“Demand is very low,” said Ken Cambie, chief financial officer of Orient Overseas (International) Ltd., Hong Kong’s biggest container line. “We haven’t seen any restocking from the retailers in the U.S. and Europe.”
BOJ May Extend Credit Steps Into 2010, Minutes Show (Update1)
By Mayumi Otsuma
Aug. 14 (Bloomberg) -- The Bank of Japan may extend its emergency credit programs into 2010 should funding conditions fail to improve enough, minutes from last month’s policy meeting show.
The central bank extended the steps for three months until Dec. 31 at the July 14-15 gathering because some companies were still struggling to obtain credit, according to the minutes released today in Tokyo.
“Another extension might become necessary if the bank’s judgment was that the situation had not improved sufficiently,” some members said. At the same time, “further improvement in the situation would justify termination of the measures.”
Governor Masaaki Shirakawa said this week that any recovery in the economy won’t be impressive as demand may not pick up enough to sustain growth. His remarks indicated that the bank won’t hurry to stop buying corporate debt from lenders and raise the key interest rate from 0.1 percent.
BOJ May Extend Credit Steps Into 2010, Minutes Show (Update2) - Bloomberg.com
Some guys have all the "luck".
Blackstone’s Stephen Schwarzman Tops Best-Paid Chiefs (Update1) - Bloomberg.com
But where will the buyers come from in the mid-to-high end areas?
Only way to sell McMansions is to be able to break them up into smaller apartments. Like so many of the old Victorians and townhouses were turned into multifamily dwellings rentals or later on condos.
Of course the HOAs in the gated communities will pitch a screeching bitch.
Ah the Rancho Plutocrat apartments.
Too much for one day.
km4 stonking video, very much enjoying that. Thanks!
Aside: If anyone enjoys listening to new music, I should recommend dandelionradio.com.
Hi all,
I haven't posted since the new comment system. Was a infrequent poster in the wild west days on the old system (what was that thing called???)
In metrowest Boston (Weston, Wayland, Sudbury, Concord, Acton) nothing high end is moving. Nothing.
This sucker feels like it's going to crack (again).
Hampoops
@ Jonathan (profile) wrote on Thu, 8/13/2009 - 7:37 pm
You are most welcome...
In celebration of Woodstock '69 40th anniversary ( this weekend ) here's my top 5 performances at Woodstock ( not ranked because it's too difficult and very very hard to choose because virtually all the 25 bands/musicians there were terrific )
Sly & the Family Stone-Woodstock-I want to take you higher
YouTube -
Santana - Soul Sacrifice (Woodstock 1969)
YouTube - Santana - Soul Sacrifice (Woodstock 1969)
Joe Cocker - A Little Help From My Friends - Woodstock 1969
YouTube - Joe Cocker - A Little Help From My Friends - Woodstock 1969
Ten Years After live at Woodstock 1969.
YouTube - Ten Years After live at Woodstock 1969.
Jefferson Airplane Saturday Afternoon Woodstock 1969
YouTube - Jefferson Airplane Saturday Afternoon Woodstock 1969
Paul Krugman:
"The irresponsibility era
Maybe it’s just my imagination, but it seems to me that there was a time when it was fairly common for people who made mistakes to admit that they had done so. But these days…"
at The irresponsibility era - Paul Krugman Blog - NYTimes.com
Of course, Paul is chiming in on a political issue. (Everything is an excuse for Paul to talk about politics. What else does he really talk about?) But it's interesting, because what he says could apply to the tens of millions of people who got to move into homes in return for an irresponsible promise to pay an unaffordable amount. They had no intention of paying, and aren't all ready to admit their mistake in the only way that matters - moving into rental homes. Meanwhile the lenders who irresponsibly loaned too much money for overpriced homes are not ready to admit their mistake in the only way that counts - absorbing the losses themselves, sans bailout.
But Paul wouldn't be interested in this kind of irresponsibility. It doesn't fit his bi-polar political world view.
I live in a northwest suburb of Chicago where home prices peaked at around 3 to 5 times the median family income of $197,000 two years ago. There are very few home sales in the area to really get a good read on how much lower home prices would have to go to sell, rough guess, maybe 25 to 30%. I really don't think that there are many buyers out there. Anecdotally, the local Costco's business is down, no wait at checkout counter now. My wife heard a customer ask an older women who was cooking and giving out samples of food at the local Jewel-Osco, a subsidiary of American Foods, where all the customers were and she said "you should have seen it in the morning". Had my garage door repaired by a company that has been in the business for around 60 years. The repairman said their phone stopped ringing about 8 months ago even though they are well advertised in the yellow pages, and when he drives to work, he notices some people manually opening their garages instead of getting them fixed. A couple of weeks ago, I went to the Home Depot and there was nobody there,and the clerk who has worked there since 2002 said she makes sure she's never late for work since business is so bad that she doesn't want to give them an easy excuse to let her go. At Midas, the car repair shop, the workers there said business has been steadily going down for the last year and a half, and one of them has a wife who works for the post office and is worried about her job. The local shopping mall that is well established and around 10 years old reported a year over year 22% drop in revenues, though not a lot of empty retail space yet, similarly, not a lot of for sale home signs or vacant homes yet.
I am thinking about the neighborhoods in Chicago which used to be higher end, like Garfield Park and the rows of homes along the boulevard. They all decayed, and, the last time I drove through that area, were barely lived in.
But it was an urban setting, and people lived there, and some became multi-units (like old Victorians). What will happen to the empty McMansions, which can't be multi-family units per code, and will sit rotting, empty shells? Bulldoze the fine marble entries and faux Mediterranean roofs?
Illinois = Michigan
Governors elected by Unions with special support of teachers Unions
Both passed same legislation on foreclosures.
All legislation did was slow then bulge the foreclosure rate.
Idiot media in both states reported the slow in the rate as a credit to the governors and legislatures.
Hey, the good news is that the median home sale price is rising!
/pollyanna
The neighborhoods in Chicago which used to be higher end, like Garfield Park and the rows of homes along the boulevard. They all decayed, and, the last time I drove through that area, were barely lived in.