Making The Best Of A “Losing Hand”
The Washington Post reports on New York. “After years of soaring prices, the unstoppable New York real estate market has either taken a breather or a truncheon to the skull, which will send it staggering soon enough. Already, apartments are lingering for weeks on the market, and for the first time in years, sellers are cutting prices.”
“Marketers of super-pricey buildings in Manhattan are engaged in a sort of high-end amenities arms race, where extravagance and gimmickry are the weapons of choice. The alliance of 255 Hudson, for instance, was celebrated at a cocktail party in the club’s showroom/garage months ago, with a couple of women hired to mingle and grin wearing little more than pasties and body paint meant to evoke racing stripes. If this is the smell of developer desperation, New York is about to inhale a lot of it.”
“‘I count 40-plus construction projects in my neighborhood alone,’ says Nouriel Roubini, a professor of economics at New York University, who lives in Tribeca. ‘There’s going to be a huge glut in six months here in New York. And unless you see a huge increase in hiring in the financial industry, you have to wonder, who is going to buy all these units?”
The Boston Herald. “A small but growing number of Boston area condo and homeowners are finding themselves ‘upside down.’ That’s real estate parlance that describes what happens when home owners owe the bank more money than their houses are worth.”
“And in a real estate market where home values are declining, it’s leaving some people who are trying to sell their homes facing a jam. Home owners whose mortgage covers most of the original purchase may walk away from a sale owing the bank a big chunk of change.”
“Lois Meisler, who runs Somerville-based Asset Disposition Management, launched her firm back during the real estate crash of the late 1980s to help banks unload homes and condos. She suggests Boston looks like a fertile market once again. While foreclosures are her bread and butter, Meisler sees major potential by specializing in short sales for home and condo owners trying to make the best of a losing hand.”
“Meisler doesn’t buy suggestions from the real estate industry that prices and sales may have finally hit bottom. ‘The brokers are saying the market is turning when we have hit bottom. I don’t think so,’ Meisler said. ‘We predict that short sales are going to become very popular.’”
“Lauren Snedecker, a mortgage broker based in Quincy, is exploring putting on a short-sale seminar for local Realtors. Real estate brokers say the math just doesn’t add up for those unlucky enough to have bought condos at the height of the boom market.”
“The first-time buyers Snedecker is working with now have a much different price limit, below $300,000. But would-be condo sellers stuck trying to unload units in a difficult market may be looking to get as much as they can, even if it’s far less than what they paid.”
“One downtown broker describes a North End condo owner who bought his one bedroom at the market’s height for $330,000. He is now ‘in pieces’ after having to sell for $320,000.”
“And then there’s the Back Bay condo owner who bought her one bedroom for $359,000 back in 2003. She put it on the market earlier this year for $369,000, just as prices and sales began to collapse. The price now: $339,000.”
The Boston Globe. “Seven Century 21 franchises in Boston’s western suburbs merged yesterday to create one of the state’s largest real estate agencies. The merger parties hope the deal bolsters their competitive edge by allowing them to combine advertising budgets, share expenses, and beef up compensation.”
“The deal comes on the heels of a shakeup in other housing-related companies, particularly mortgage lenders adjusting to the end of a market boom. A plunge in home sales has stoked competitive pressures. Local banks said they have shaved their lending units slightly, Eastern Bank by eliminating the overtime required in boom times and by reassigning a few employees and Citizens Bank by attrition.”
‘A dramatic increase in new housing units and a lower-than-expected number of demolished homes were key to convincing the U.S. Census Bureau that Boston’s population has indeed grown since 2000, city documents released yesterday show. The city, which had objected to previous census estimates that Boston’s population was declining this decade, blitzed the federal agency with 50 pages of charts, maps and statistics on everything from students living in the city to undercounted low-income residents.’
‘But the clincher for the bureau’s recent decision to bump up Boston’s population estimate, was construction of new residential housing as well as conversions of commercial properties into housing, records show. A total of 4,852 housing units were built or converted since the last census count in 2000. At the same time, the city argued that there were only 1,851 demolition permits taken out since 2000, far below the 3,715 the bureau estimated in recent reports.’
ha ha, now they are counting ghosts in the census
Does the 4,852 include cancelled orders?
This is interesting. In the past, I suppose you could expect some correlation between housing units and actual population, but nowadays, this is not such a straightforward relationship. Just think of Pinellas County and the ‘disappearing’ of school kids. And here in Sussex County, Delaware, I drive past acres of mansionettes, unlit at night. Plenty of houses, no people. As for the decrease in demolition permits, I’m wondering how this is a presumed plus in terms of population growth.
what’s been happening for years in my neighborhood in Chicago is that gentrification will increase the number of housing units, but they will be occupied by fewer (wealthier) people.
For example, an older junker three-unit apartment building that formerly had three families with say 14 residents will be torn down and four new condo units will take its place, with maybe a total of 6 or 7 residents.
So if Boston’s population growth consists of students and low-income immigrants, this is somehow supposed to prop up the real estate market?!
yes, it will.
Families from 3rd world countries, living 2 or 3 per unit, will have a better economic existence compared to the place they left. Extra earners can split the rent, just like we all did when we were students. Well, as least I did. There were 4 of us in a two bedroom apartment. For the wealthier students, and those the falsified their student aid applications, well, they had their own rooms.
“A total of 4,852 housing units were built or converted since the last census count in 2000.”
How does a conversion increase the housing supply?
Do more people live together in an owned unit than an identical rented one?
Previous sentence says “conversion of commercial properties”, and I think that’s what is meant here too.
I see. I skimmed a little too aggressively.
“the city argued that there were only 1,851 demolition permits taken out since 2000″
I’ll bet Detroit generate far more vacant buildings each year than there are demolition permits. I would argue that fewer demolition permits indicates little pressure to revitalize a city. Boston is a very old city, and it should follow that there are many obsolete structures that a growing population would seek to replace.
BTW, what’s the backlog on vacant structures that Detroit needs to tear down, 12,000?
‘“‘I count 40-plus construction projects in my neighborhood alone,’ says Nouriel Roubini, a professor of economics at New York University, who lives in Tribeca. ‘There’s going to be a huge glut in six months here in New York. And unless you see a huge increase in hiring in the financial industry, you have to wonder, who is going to buy all these units?”’
Fortunately for the builders of these projects, the financial sector is certain to grow, which will bring in a flood of newly-minted McTrumps to the neighborhood who will sop up all of that new supply as they start out their real estate investment careers.
yes, and Roubini was the one economist who has been correct on the gdp last 2 Q’s ,and predicts .5gdp for Q4 ,and ‘recession next…..
Isn’t .5gdp growth (or for that matter 1.6% gdp growth) with a CPI of 2.7% indicate recession right now?
Recession is technically two quarters of 0.0% or lower real GDP growth. But you’re right - and often it is not even known technically that you are in a recession until you come out of one. For example, Q4 GDP growth could come in at 0.5%, but then be revised downward (two revisions) so that in March it is discovered that Q4 was actually, say, down 0.2%, about the same time that Q1 is discovered, say, down 1.0%. All of a sudden people will say we are in a recession when we theoretically could be finishing it up (not saying we would be, but this is EXACTLY what happened in the last two recessions). In fact, in 2000 a huge majority of “economists” were saying we wouldn’t go into recession at the same time we were already in one.
Also, 0.0% real GDP growth in America is actually negative per capita and lower than in other westernized countries - because we have population growth.
Didn’t really address the CPI issue: most GDP numbers are given in real (inflation-adjusted) terms, so, no.
“In fact, in 2000 a huge majority of “economists” were saying we wouldn’t go into recession at the same time we were already in one.”
To paraphrase Leamer, I predict a 50-50 chance that we are already in one right now…
I think these numbers are already corrected for inflation. But there is some debate about the inflation number.
The “GDP” reported in the media (such as last friday) is always real GDP. A separate number is released for the deflator.
A separate criticism is whether the deflator accurately measures inflation.
We won’t know until final revisions are made in a year or two. Reason is CPI, theoretical value of a basket of goods, is not used to determine GDP. There is a separate gross deflator used. A good deal of the deflator is based on non-farm productivity (which was revised to 0 this morning) and unit labor costs (which were hiked by 2 percentage points this morning). Also the imputed value of household wealth is used to adjust the deflator (rising housing prices = less inflation, falling prices = more inflation). Don’ ask how that’s possible.
Finally, this qtr was reported with a 26% increase in auto manufacturing which is likely to be revised down. The actual number my firm calculated is 0.6-0.9% GDP. Which is basically recession territory.
classic bubblicious hype:
[i]One apparent answer: fans of Jade Jagger. Mick’s daughter, a designer and pioneer of something called “pod living,” created the combination kitchen-bathroom modules that sit in the center of the apartments on sale at Jade, a building in Chelsea. To the uninitiated, the pods look like something from the motor home of the future. But the owners calls them “jewel-like lacquered boxes that seem to float in each residence.”
One-bedrooms start at $945,000.[/i]
the first thing to go will be the pods
[i]Basically, a decent gym and a whirlpool won’t cut it any more. Residents at 20 Pine in the Financial District can sweat out the day’s stress in a Turkish sauna in the building’s fitness center, or drive and putt with an 18-hole golf simulator, or just wallow in the building’s public spaces, designed by Giorgio Armani. Those on the 25th floor and above have access to a personal concierge who would be happy to book your travel plans or buy you an English bulldog in an afternoon, if that’s what you want.
One-bedrooms start at $960,000.
“It’s a lifestyle package,” says Michael Shvo, a “real estate force to be reckoned with,” as it says on the Web site of his eponymous company, which conceptualizes and markets luxury condos. “The market today has become a smart market, which means the buyer today has options. He doesn’t have to eat what you put on his plate. Product that has an advantage is product you can’t buy from your next-door neighbor. You can’t buy an Armani Casa residence from anyone else. You have to buy it from Shvo.”[/i]
Who says you HAVE to buy their marketing hyoe or their overpriced apartment?
Yeah, I love that “you have to” stuff. Reminds me of mortgage traders calling me up and trying to buy my notes (which I never wanted to sell). For a 9% note they’d be offering me a price where they’d get a 14% yield. And I’d say “not interested”, and then they’d say, “Well, you’d HAVE to go with this other approach, blah blah blah” and I’d say, “I don’t HAVE to do any of it.” I think they were used to the idea that any private individual holding mortgage paper must have been forced to take it back as part of a house sale.
From the article:
And unless you see a huge increase in hiring in the financial industry, you have to wonder, who is going to buy all these units?”
I read on Minyanville yesterday that entire trading desks are being laid off. Many layoffs on WS. And the market is fat now. What happens next?
Txchick,
You always have inside news…
So if entire trading desks are being laid off, it means they’re cutting costs and that the word we be out for *all* companies to cut costs. Not a good time to be in the financial industry.
Neil
It may be more a function of increased black box and anti-Martingale trading by hedge funds, etc. and less necessity for “people” (i.e., you call brokers and shop your trades around). The ECNs have virtually replaced the old market maker system. That’s not the same as layoffs because business is bad, however, the net effect on the local economy is the same, I guess.
Students in my department (CS at Cornell) are still getting lots of offers as quants as hedge funds for what it is worth.
I don’t doubt that. The hedge fund “industry” needs to be cut in half.
“pasties and body paint”
Can prostitutes be far off?
Well let’s hope not. I’m getting tired of the same old refreshments being offered at these open houses.
I’m envisioning an “Eyes Wide Shut” type of sex orgies at every real estate open house now. Problem is, since everyone’s face is covered up, the guy who offered the Realtor 1.5 million for the SoHo studio is not quite readily identifiable…
Well, I certainly concur that a lot of people are going to end up getting screwed.
You don’t even know the half of it. I walk past that car dealership all the time. That neighborhood sucks with a capital “S”. That neighborhood is south of anything that’s happening in the Village and West of anything that’s happening in Soho. There are some high-end furniture stores and office buildings and that is it. The few restaurants over that way always seem dead after 5 o’clock. I think they maybe do a good lunch crowd. There is nothing to do over there and I know of no subway stop there. The Hudson would be blocked by all of the new taller apartment buildings and condos so there is no possibility of any view of the water.
The intersection near the tunnel, on Hudson, is something else. It is in a goofy pentagonal design. I pray I make it across alive every time I have to go across. The crosswalks are a mess. Sometimes they have a traffic cop out there but I’m even more afraid when they are out there. All they do is confuse the drivers that are hauling a$$ to get to the tunnel.
I can’t imagine anybody that would pay $3 million to live in that neighborhood. At least with Soho, Tribeca and the Village you have things to do. To think there is anything to do at 255 Hudson is a complete joke. If you plunk down your bag full of money on one of those places you will have years to ponder why you are in such a crappy neighborhood. This just can’t get any funnier.
As far as I’m concerned the Planning Departments of many cities were giving permits on any request to build .I don’t know if the Planning Departments were operating on bogus data or not but everybody I know is complaining about how there isn’t enough roads to handle all the people from all this new construction .
What does it do to a city to have a bunch of vacant houses for instance ,especially in terms of crime ?
I have seen structures set for years until they are finally bull-dozed down .
I still think that many of the builders were counting on speculators buying a certain % of their units and of course every town in American thinks the baby boomers were going to buy their new housing stock at inflated prices .
I love how that guy is “in pieces” at having 10000 shaved off his purchase price. He’s a lucky one.
But, if he cashed-out equity, the sale price doesn’t tell the whole story.
I was thinking the same thing. However, he inevitably rung up another $25-30K in RE commissions, title searches, gvt fees, application fees and so on. Still, if he got out the door at a $30-40K haircut, he’ll still look good a couple years from now.
Gee. Maybe NYC should yank rent control so “prices go down” as one poster here advocates.
Maybe without rent control somebody would actually want to build some rental housing in the city.
Oh they’re building plenty of rental housing, right now. The buyers just don’t understand it yet.
Please tell me where this rental housing is being built. I can’t think of a single new rental building being constructed. Captain Credit is right- the market paralysis caused by rent regulation, combined with the lack of new rental units, along with the slowdown in sales, is creating a perfect storm of skyrocketing rents. Landlords are laughing all the way to the bank.
Hejiranyc - i think yogurt meant that the new condo developments will turn into rentals because they won’t be able to sell all of the units as condos.
What he means is the unsold condos eventually going rental, which is starting to happen (55 Berry, for instance). While rent control does cause some problems, getting rid of it won’t reduce rents. Decontrol reduces demand by forcing people out of the city. Boston and Cambridge did not get less expensive when they eliminated rent control in the 90s.
You might want to read the article closer -
“Already, apartments are lingering for weeks on the market, and for the first time in years, sellers are cutting prices.”
The problem looks the same in NYC as it is everywhere else - demand is suffering.
Right, the economic ramifications of policy actions are more than the next few months. In fact, the biggest truism in economics (and life, even) is that the short-run and long-run effects are oppposite of each other. No pain, no gain.
When rent control is yanked today OF COURSE the effect tomorrow is that rents go up, because supply is fixed in the short run. But in the long run, three things happen:
(1) non-rent-controlled units are competing with now-higher-priced units, and rents in them are pressured downward;
(2) more units are added to the market, since there is less market interference
(3) rent-controlled units are improved.
It’s a myth that “rent control” influences the NYC housing market -there are so few of these units left. And “rent stabilizaton” is on its way out too - - the market is becoming largely deregulated –just in time for the bust, so it won’t matter much, because landlords will be desperate to fill space created by the building glut- in williamsburg a couple of lux condo projects already have been repartmented -and many more will be.
I heard on the local NPR station that half of the apartments in NYC are rent regulated. “Rent stabilized” means that the apt is priced under $2,000 a month, and can go up every year or two years (based on the lease) a certain fixed percentage (say, 2% for one year or 8% for two years). Landlords can increase the rent for capital improvements to the apt (at something like 1/40th of the renovation costs). And the apt building has to have at least seven units; smaller buildings cannot be rent regulated. Once the rent hits $2,000, it is effectively de-regulated, and the landlord can charge market rate. (”Rent control” is a different thing altogether; the rental price is fixed for the life of the tenant, and immediate family can inherit the lease.)
BTW, I think they aren’t really creating any new rent regulated apartments (unless, for example, the developer wants a special tax break), so there’s nothing stopping development of new rental apartments (except the usual reasons, zoning, availability of land, etc). Bloomberg just proposed a huge new moderate income rental development in Queens — moderate being 60-120K per household or so.
About ten years ago about 2/3rds of all apartments were rent regulated. So, as you can see, deregulation is already happening. It’ll be interesting to see what happens.
What? My apartment costs over $2,000 per month and I am rent stabilized. Where did you get your information?
Rent control sucks. The new tenants subsidize the old ones and the rents are artificially high for the new and artificially low for the old. Welcome to the New Deal on 14th Street.
OT, from the WSJ:
“Home & Family: Go Figure / Reversing the Mortgage”
“The number of federally insured reverse mortgages jumped 77%, to 76,351 from 43,131, in fiscal 2006, according to the National Reverse Mortgage Lenders Association. With a reverse mortgage, homeowners 62 and older can borrow against their home equity, and the loan isn’t repaid until the homeowner moves or dies.
What To Do
– Calculate your worth: You may not be able to borrow as much as you think. Use this calculator to see how much you can borrow, based on your age, your home’s value and prevailing interest rates. http://www.reversemortgage.org/
– Factor in costs: Homeowners may pay a fee of up to 8% of the value of their homes. Of that, 2% goes to government to insure the mortgage, 1% to 2% goes to the lender, and the rest pays closing costs.
– Consider your options: If it’s likely you’ll need to sell the home in the near term due to financial hardship or illness, a reverse mortgage may not be worth the cost. Instead, consider downsizing to a less-expensive home to free up equity.
– Show me the money: You can receive reverse-mortgage money as a lump sum, fixed monthly payments (for up to life), a line of credit, or a combination. More than 60% of borrowers pick the line of credit. You can draw on proceeds at any time.”
Can’t a retired person just get a home equity line of credit without paying all the fees associated with a reverse mortgage ?
I know a 83 year old that got a reverse-mortgage where they pays a monthly payment to her like a pay check . She owned the property outright .I guess she was concerned about being able to last on socialy security and she didn’t want to move . I think she said that she gets payments until she is 103 ,(sounds like a 20 year payment structure ). I’m concerned that she might of had a better route ,but I need to study reverse- mortgages first .
The biggest growth area for baby boomers will be in trashy trailer out in the middle of barren god-forsaken land because it will be CHEAP, and as they are completely broke. I would guess some teeny towns with a lot of empty land might see some growth, so that at least these ‘rich’ baby boomers (who are lucky to have $100) will be living outside of such garden places as Needles CA, Barstow, CA, Winslow AZ, and along other major freeway cooidors (10, 80, 40, 25, etc).
You know it, and the fast food giants will have all the cheap labor they will ever need - even if they are a little slow and mess up a couple of orders. It’ll be funny to watch boomers and immigrants fight over not only the same jobs, but the same trailers too. My money’s on the immigrants.
Yeah I am seeing more boomers at local retail lately. I am always so surprised why someone that old would work such a low level job. Then I realize ex felons need to work somewhere. I am also seeing tons of homeless on the street. This situiation will only increase.
need to leave Ca. ….Yep , there will be a big market for cheap retirement places . Retired people do not dislike trailers as much as people think they might . If you upscale the trailer parks and give them pools, spas ,rec. centers etc. alot of retired people could enjoy that cheap living . Wasn’t that the big draw in Florida for years that retired people could go to nice trailer parks and have alot of fun ?
I always refered to Florida as the trailer park version of California.
But your right need to leave ca , many retired people will be flat broke and they will end up in these remote places because they can’t afford anything else .
“the math just doesn’t add up for those unlucky enough to have bought condos at the height of the boom market.”
You mean foolish enough! How about ignorant enough (I’m trying not to be rude here)?
Yea it was just bad timming and bad luck!
So now it’s they’re telling me it was about “luck” and not “genius”? I’m going to have to recalibrate my thinking.
So now they’re telling me it was about “luck” and not “genius”? I’m going to have to recalibrate my thinking.
Better.
“I’m not a believer that gas prices sway consumer spending,” said Marshal Cohen, chief retail analyst with market research firm NPD Group. “But yes, when I hear that my house today costs less than it did last year, that will impact my spending.”
Actually, I think gas prices *do* have an effect in the longer term. One can cancel or scale back vacations/personal travel and can choose a shorter commute when it’s time to move. And I’m seeing a ton more Prii on the road. (more than one Prius = Prii?)
$3 gas first appeared last September, so longer-term decisions have had time to kick in now.
Ford & GM’s SUV sales way up for the month of Oct. Go figure, hard to believe 80,90 cents per gallon change minds that easily.
Home owners whose mortgage covers most of the original purchase may walk away from a sale owing the bank a big chunk of change.
How does this work? Foreclosures…
Say I have a $300k mortgage on a house I cannot sell. The house goes into foreclosure. I’m assuming what is next is the bank takes ownership and sells the house. But let’s assume the bank only gets $250k for the home. My question is who pays the $50k loss? Does the home owner or the bank or the mortagage investors?
My father in-law who was a house flipper (though he never flipped a single investment property) has undergone 3 foreclosures this year! He is part of the baby-boomer generation that is about to retire, yet, like many his age, didn’t save a thing for retirement. So, this was his attempt to “save” for retirement. Ooops! What I can’t figure out is how screwed he is after foreclosing on 3 properties. I know he had, at best, 5% of the value not in the mortgage amount, but that was before the falling prices. I understand it certainly wrecks his credit, but does he have a financial responsibility for the property value loss.
Depends on how much money he has in his bank accounts. If he is flat broke and the banks can’t collect on the difference between what he owes and what the property sells for, the banks will write it off and send him and the IRS a lovely note saying that the difference is a profit to him and he as to pay taxes on it.
Otherwise, they’ll collect from him as much as they can get. Either way, he’s paying Uncle Sam or the bank cash.
He is in the flat broke camp. So, basically whatever the difference on the sum of the 3 homes will be taxed as investment profit. Very interesting. Thanks for the education on this.
He’s in the “taking it up ass” camp since the lenders will be sending him a form 1099 this year for the amount of loans forgiven. Color him history.
He’ll be ok. He had a backup plan of taking a monthly stipend from his daughter and son in law.
Somebody correct me if I’m wrong, but I seem to recall that (at least years ago) if you receive debt forgiveness and are insolvent, that the forgiven debt is not taxable? Is this right and/or has it changed with the new bankruptcy law, etc.?
Interesting? Does anyone know if this is true. My father in-law acted like he doesn’t owe a thing because they [the bank] can’t get anything from someone who has nothing. Perhaps he is thinking his insolvency is protecting him in the way mentioned in the post above?
It depends on state law. Many states have laws that force the bank to accept whatever it can get from sale of the house, but these laws are usually aimed at primary residences. It seems unlikely he would be able to walk away from the mortgage on three properties at once.
He didn’t really have a choice from what I can see. His “job” has been flipping property since his small business went under also this year. He couldn’t make the payments on the three houses if he wanted to. The condo in Florida was let go in the early summer. The vacation property in Northern Michigan was let go early this summer and his primary residence (which wasn’t really a flip) was on the market for 3 years because he was upside down on the mortgage due to his Home ATM syndrom. That last property was let go this past month.
His home state is Michigan.
kinda sad really. MI is a tuff state to earn a living these days. guess he had nuttin to lose.
Do you have a comfy sofa?
OT, but here’s how to make 125K while the going still good. Let’s raise the price.
“Sonya Leonard Leonard, who owns a real-estate firm, said her own industry is guilty of various practices that can put a false value on a house, from counting basement space in the listed square feet to undercounting how long it has been for sale.
She told Zavislan she had complained to several state agencies and the FBI when the prospective buyers of one house wanted her to raise the price from $499,000 to $625,000 and kick back the difference to a third party. “
NYC has another problem I am starting to worry about. The NYC housing market is not just entirely dependent on Wall Street. It also depends on numerous entrepreneurs and the numerous other occupations that support the Wall Street driven buisnesses. I’m talking about law firms, accounting firms, advertising, design, media, etc. One of the side effects of the insanity related to condominium construction is the destruction of commercial office space. Buildings have either been demolished or more commonly converted to condominum space. This has driven commercial office lease costs sky high. $100 plus a square foot is no longer uncommon with the right lcoation and views. The trickle down effect is operating costs for NYC buisnesses are through the roof. Inflation in NYC was up to 4.7% in the 2Q. I predict you will see many buisnesses forced to scale back hires, expansions, purchases as well as more buisnesses failing or moving out of NYC. All of this will negatively effect the NYC housing market is a significant manner.
Interesting points. And that’s the rub of all B2B service-based economies, not just NYC but throughout many large cities around the country. They’re essentially just feeding off each other so when there is a shock to finance/tech/etc it reverberates throughout the rest of the economy.
You are correct, finnman. I live in a building that was just converted from all office space to apartments. It’s going on left & right. The glut of inventory is so obvious.
NYCityBoy, while I agree with you, my NYC neighborhood has had the experience of having lots of new apartment buildings with no one to buy. One was recently bought by a university and turned into student housing, but with several others in the late stages of construction, I predict you may unfortunately see many well-off neighborhoods with vacant homes and apts.
(One of the side effects of the insanity related to condominium construction is the destruction of commercial office space. Buildings have either been demolished or more commonly converted to condominum space. This has driven commercial office lease costs sky high.)
Yup, it’s a big problem. 9/11 didn’t help either. If a recession doesn’t choke off our growth, the commercial real estate market just might. Then again, perhaps more of us could just work at home.
Housing Wizard. I also love your posts. You are so right on. I drive the I-40 corridor between Albuquerque back to LA frequently. So I just picture all of this lovely empty land filled with FEMA trailers in circles around the few towns located along this route (Barstow, Needles, Kingman, Flagstaff, Ashland, Winslow, Holbrook, Gallup, and Grants) for these broke boomers. I also picture that many other interstate or major highway routes will be similiar in the more southern routes from FL to CA. And, I too, see many seniors now working in retail and fastfood places. These people deserve some respect in that they are at least trying to provide for themselves. But certainly tough if a previous career was higher paying and viewed as more prestigious.
As for Chris’ FIL. He is probably not the only deep in the $&&#((@ broke boomer. Sure many more like them. They will even be worse off than someone that is just ‘broke’. Being at zero sum is not as bad as being so deep under that you don’t have a chance. I hope you have an extra room Chris. FIL will be knocking at your door soon (if haven’t already).
My in-laws have been over for dinner the past three nights and recently moved in with my sister in-law. I’m waiting for the request to inject some cash in my in-laws’ bank account. Not the first time such a request has been asked and given by my wife.
Family. Oh, what fun.
Need to leave Ca. ,I was gone all day so I didn’t see your post until late .
I also see your visions of where some retired people will end up and I also respect retired people that try to work if their health doesn’t prevent them from it .
Sometimes I can’t sleep at night thinking about how many lives will be altered because of this stupid real estate mania .