June 12, 2014

As The Market Changed, The Middle Class Changed Too

The Worchester Business Journal reports from Massachusetts. “Confidence among Massachusetts Association of Realtors members statewide fell for the seventh straight month from 83.08 in May 2013 to 67.73 last month. And the group’s price confidence index fell year over year from 81.95 to 76.58, marking the second consecutive month of decline. ‘Buyer demand is strong based on pending sales, and hopefully that should start to push the Realtor market confidence index up in the coming months,’ said MAR President Peter Ruffini.”

The Worchester Telegram & Gazette. “Worcester’s real estate market is among the bottom 5 percent of large metro areas in the U.S. according to CoreLogic. A closer look at the recent market suggests that there has been a big drop in the number of transactions, lots of properties on the market, and a drop in prices. The number of homes for sale is significant — with a huge proportion of foreclosed properties — and the listing prices are dropping.”

“As Trulia explained, ‘There are currently 589 resale and new homes in Worcester on Trulia, including 5 open houses, as well as 583 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Worcester was $213,999 in June, which represents a decrease of 1.7 percent, or $3,743, compared to the prior week.’”

The Valley Advocate. “Last Sunday morning, I took a walk around a neighborhood the Valley Advocate has written about a lot in recent years: the part of Forest Park that lies to the northeast of what is known locally as ‘the X’. On Leyfred Terrace, where we’d found a dozen or more homes vacant and boarded up in 2008 and 2009, I saw little visible sign that circumstances had changed much in the last five years. There may be slightly fewer boarded-up houses, but many homes appeared unoccupied, or at least uncared for. Turning on to Dickinson Street at one end of Leyfred Terrace, I saw more of the same.”

“I called longtime Forest Park activist Sheila McElwaine, who’s spent the last three decades fighting urban blight. I asked her if I was wrong in my impression that, while other parts of Massachusetts and even Hampden County have seen some improvement, Springfield is still dealing with a foreclosure crisis. ‘Things got a little better for a while,’ she said. ‘But just in the last year or two, something’s happened.’ Walking or driving around the neighborhood, McElwaine said, she sees recently occupied homes suddenly abandoned and boarded up: ‘We ask each other, ‘Why is this one boarded up? Why is that one boarded up?’”

From Mass Live. “RealtyTrac reports that early-stage foreclosures in Massachusetts jumped 178 percent year-over-year. Peter Gagliardi, executive director of HAP Housing said one reason early-stage foreclosures have spiked is that many lenders held back from filing while they waited for the economy, and the value of the home, to improve. ‘That was the banks,’ he said. ‘They held off on a lot of people, keeping them in limbo and now they are moving on them.’”

The Boston Globe. “The hardest part of battling eviction is the not knowing, Lavette Sealls said. The 58-year-old Hyde Park resident told her story to a crowd of more than 60 at a rally for affordable housing in Dorchester. The day’s main event was the occupation of a vacant home owned by Fannie Mae. ‘You’re always living on edge because you know eventually you might have to move,’ she said. ‘You go on fighting as hard as you can.’”

From Sampan. “Former Roxbury homeowner Paul Adamson lost his home in the foreclosure crisis. Adamson and his wife occupied the vacant home at 193 Norwell Street, where the rally was held, this weekend, only to be forced out by police yesterday. He commented on the irony of homes sitting vacant while homelessness rises. ‘Many of the homes are underwater, but they are not willing to allow the people to stay in their homes and pay rent. When families are desperate and they don’t know what to do, they want to move in to evict them. It’s thoroughly unfair and doesn’t make any sense—these people are willing to pay them rent!’”

From WGBH. “Ten miles from downtown Boston, Newton Centre sits at the crossroads of America’s upper-middle class. But the Mercedes Benzes and BMWs parked outside Peet’s Coffee & Tea mask the anxiety some here are experiencing about their place in the area’s complex economic landscape. ‘I’m just one of many, many, many that were in my position, that lost their jobs,’ said Ken Jaffe, a former community outreach executive at a local bank who was laid off in 2012. Before he was shown the door, he and his wife made a combined $150,000 a year. ‘But then all of a sudden, $120,000 is not there anymore.’”

“Jonathan Cohen says that in spite of earning ‘more than $150,000,’ he’s still insecure. Cohen says in his community, where the average home cost is $899,000, income is trickling down less and less each day. One-hundred-fifty-thousand a year is not what it used to be, he says. ‘Between income taxes—and those, I think, are fair enough—and property taxes and where I choose to live,’ he said.”

“Some have little or no choice where they live, and professor of social work Tiziana Dearing of Boston College, says even neighborhoods in Boston that view themselves as lower middle class are becoming too expensive for many. ‘And we’re certainly seeing that in the real estate market today,’ Dearing said. ‘Post-World War II and into the 1950s, we really put great cultural emphasis on the importance of owning your home in order to be middle class. But as the real estate market changed, that may be changing for us, too.’”

“‘I think that unless we can find a way to solve our housing problem, we cannot solve the income inequality problem,’ said Barry Bluestone, an economist at Northeastern University’s Dukakis Center. ‘Because if you think about income inequality, it’s not just, ‘Do you have a high income or a low income,’ it’s ‘How much does that income buy you?’ And so the real problem in Boston is not only do we have the fourth-highest degree of income inequality but we have the second or third highest cost of living.’”

Bits Bucket for June 12, 2014

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