A Market Cycle That Was Overdue
The Billings Gazette reports from Montana. “Ripples from the national mortgage mess are upsetting some Montana borrowers. Mike Thelen, VP of Professional Mortgage Consultants in Billings, said that in early August a client buying a house signed papers on a Thursday for a 30-year conventional loan. ‘The following day, the wire wasn’t sent and the lender’s phone wasn’t working,’ Thelen said. ‘On Monday, I received a notice they were out of business.’”
“The national company, Aegis Wholesale, cut off funds in two other Montana house deals, he said. ‘My borrower never got this house,’ Thelen said.”
“In early September, Wallinder said the national belt-tightening affected some of her loans that were ready to cross the finish line. ‘Wells Fargo sent us an e-mail saying if we didn’t have our subprime loans closed in three days, tough luck,’ said Kim Wallinder Moffet, owner of Wallinder Mortgage in Billings.”
The Daily Interlake from Montana. “From August 2006 to August 2007, the number of homes sold through the Northwest Montana Association of Realtors Multiple Listing Service dropped by 45, from 262 in August 2006 to 217 just last month. That’s a 17 percent drop for Flathead, Lake and Lincoln counties.”
“‘Prices are starting to stabilize, but that’s just a good market correction,’ Kalispell Realtor Ted Dykstra, Jr., said. ‘We needed a market correction for a number of years.’”
“He estimated that stretch of too-high prices ran for perhaps the past five or six years. ‘The correction started somewhere back in March. April and May were somewhat soft, then June and July were real soft.’”
“In a slowed-down market with plenty of housing stock to choose from, said Greg Carter of Rocky Mountain Real Estate, they can take their time and be much pickier on when and what they buy. When they find the right home, they can spend what it takes to snag it — but, he said, they also can wait for a price drop.”
“‘We haven’t seen this kind of market in a long, long time,’ Realtor Dave Alexander said.”
“From his standpoint at West Venture Properties, Alexander sees ‘we’re definitely heading toward a buyer’s market, and coming out of a very long seller’s market … I don’t think it’s a bad market. It’s a different market.’”
The News Tribune from Washington. “Come next month, some of the cheap loans that got U.S. buyers into homes they might not have otherwise been able to afford are expected to get far less cheap. Adjustable-rate mortgages already are resetting.”
“Lisa Brady finds herself among the local buyers caught unaware that her rate would reset after two years. Brady financed the purchase of an 803-square-foot home in Parkland with two loans, the larger of which adjusted in August from a 5.0 interest rate to 11.5 percent.”
“‘In these little teeny tiny letters it says it goes to an ARM after two years,’ said Brady. Payments for the two loans combined jumped from $800 to more than $1,400, she said.”
“Brady said she didn’t see the small type when signing the loan documents and her loan broker, a friend, didn’t tell her the term would adjust. Because she’s been late on some of her mortgage payments and she makes only $22,000 yearly plus tips, Brady said she’s been unable to refinance.”
“‘I’ll keep struggling and make the payments or get a second job,’ she said. ‘I don’t want to lose my house. I can’t lose my house.’”
“It’s not necessarily adjustable rates that are getting borrowers into trouble; it’s the options attached to them, such as deferring interest that gets added to the principle, said M.J. Walsh, a senior loan consultant at Pierce Commercial Bank.”
“‘What we’re experiencing today is a result of poor lending decisions that the industry made in the last 24 months. I don’t blame the people or the government. I blame the lending industry that made loans they shouldn’t have been doing,’ she said.”
“Some potential borrowers, she said, are stuck in homes they expected to sell, because adjustable rates are no longer an option. A client recently pulled his house off the market in Gig Harbor, where prices aren’t keeping up, because he couldn’t get an adjustable-rate loan that would make up for the equity he’d lost, she said.”
The Spokesman Review from Washington. “Spokane keeps waiting to see if the credit crunch afflicting the mortgage industry across the country will spread to the Northwest.”
“In Spokane County there are 3,240 listings, about 26 percent more than a year ago. Those with a higher price tag need extra work, though, noted Grant Forsyth, an Eastern Washington University economist, ‘people from outside are still kind of astonished about what you can get for your money and how modest the taxes are.’”
“There’s another problem that will arise next year, said Tom Flanigan, branch manager for Golf Savings Bank. More than $3 trillion of adjustable rate mortgages change from their fixed-rate introductory years to the variable interest years beginning in 2008. This, Flanigan said, is when the credit crunch could bite Spokane.”
“‘There’s a ton of adjustables here,’ he said.”
“Too many people have tapped the equity in their homes and spent it rather than saving or investing. ‘Are we immune or do we have our heads in the sand?’ Flanigan asked. ‘Who’s to say?’”
“Jeff Berglund, owner of Morgan Mortgage in Spokane, said the problems with credit are about context. ‘The sky is not falling. People who are taking care of their credit are going to be fine,’ he said. ‘Some people may have to wait a while to buy their first home, but that’s OK. For a while there, it was easier to buy a first home than to qualify to rent an apartment.’”
“He called the credit crunch part of a market cycle that was overdue and believes that there was a national housing bubble. ‘We just simply couldn’t keep up, and yes, I think we’ll see some of it in Spokane,’ he said.”
From KGW.com in Oregon. “Is the bubble bursting in Portland’s pearl district? Dismal sales in a new condo building have forced developers into converting the property into an apartment building.”
“Condo buyers at that building are getting their money back with interest, and trying to figure out what to do next. Gabby Lang is moving from Las Vegas to Portland’s Pearl District. He says he found the perfect condo in the almost completed, 238-unit building. Everything looked like it was going smoothly until this week.”
“‘I did a walk-through last week. I flew up and the place looked great. And I was a little excited,’ he explained. But the excitement is over. After a half year of marketing the Wyatt, Pearl Real Estate has sold only a quarter of the building’s condos.”
“The developer has made a decision that converting the building into apartments will blunt any losses. ‘It’s a tough decision,’ said Chris Suarez, Pearl Real Estate’s principal broker.”
“‘It’s definitely a buyer’s market out there right now. There are buyers out there buying. They’re just taking a lot longer to make that decision to buy,’ he explained.”
“But what about the big picture? Condo tower construction cranes loom still loom over parts of the Pearl District. Does the Wyatt conversion signal a trend?”
“‘That was inevitable at some point,’ said Larry Brown, a city development manager.”
“For now, though, price-cutting is common with re-sale condos in the Pearl. Hoyt Street properties, which is also marketing new condo towers, says the slowdown shouldn’t impact local buyers, the ones who plan to live in the Pearl District.”
“‘It’s more the people that are investors that think they come in and buy something and flip it and make $100,000 in a year. I think those are the people that we’ve lost,’ said Marilyn Anderson, principal broker at Hoyt Street Properties.”
“Lang has had time to reflect on his situation. “Lang says if the Pearl’s condo market is having a hiccup, he’s happy to get his investment money back from the developer and try again later. ‘Everything happens for a reason. So I’m very happy,’ he said.”
The Pearl is one of the neatest places I’ve ever seen but prices are of another planet. It would be great to see that area become affordable.
I knew you would get a kick out of that one. Why not just rent?
I’m e-mailing that one to my sister. She still thinks the pearl district is where she wants to live.
Neil
Awesome, simply awesome condos there. If you’re an architecture buff, you gotta love that place.
You gotta love it no matter what; it’s fabulous. Portland really is a great city. I love going there, and I do, lots.
I was going to end up there, was my 5-year plan, I decided that as soon as I ever visited, but now I am in Olympia, WA, instead which is of course the best place ever and I’ll fight anyone who says it isn’t. But Portland, OR is absolutely great.
I prefer Olympia to Portland as well. Of course, I love being near the Puget Sound. I’m about 30 miles outside Olympia.
Are you really? What area?
Puget Sound! Puget Sound! Rah rah rah! Puget Sound!
I’m in a nice area of rural Chehalis, with horse, hay, and tree farms for neighbors. Out in the country, yet not far from the city which is just the way I like it. I can view elk from my living room.
Bear,
are you in your new house? Sounds like you’re happy.
Oh, Chehalis is nice. Your spread sounds great.
I too like out in the country, but close to the city–Olympia, for me. I’m out on one of the peninsulas north of Olympia, with the same sort of neighbors. I just ate crackers with a giant tub of fresh chevre one of my neighbors made from milk he squeezed out of some goats the other day. That’s the sort of neighbor I enjoy.
(Remember, Bear–Washington sucks. Spread the word. It rains all the time, and Bigfoot is a jerk, and lots of very pale people just walk up and punch you for no good reason. Right? Right.)
It’s also become one of the most dense people-wise. Make no mistake they’ve revamped a former derelict warehouse district. I guess it depends on your perspective. I lived there in 98-99 when there were a few condos and townhomes. It was very navigable and you could park on the street for free. Now there’s high-rise condos on every block with more coming and a bunch of BMW-driving urban hipsters everywhere. IMO, it’s gone way past an acceptable level of growth. Unfortunately, my taxes subsidize it too.
And I really don’t see how the architecture of the condos here is any different than that in say…..Dallas. I like Portland. I just don’t understand all the praise heaped upon it. A case of “perception is reality” I suppose.
“‘It’s more the people that are investors that think they come in and buy something and flip it and make $100,000 in a year. I think those are the people that we’ve lost,’ said Marilyn Anderson, principal broker at Hoyt Street Properties.”
Correction, everyone thought they could make $100k/year. So people bought on temporary assignments, flipped, and most of all bought more house than they could afford. Now we start the correct.
Visited a few open houses yesterday with the Misses. The one that had two other groups touring was an eye opener. Both of them told the realtor the seller had to cut the price. One was blunt enough to point out that an area with larger and nicer homes was going for the home’s list price. The other guy yelled, “cut the price $200k, why did you waste my time.”
I should note, the exact same house next door sold for $3k less and this home was in escrow. Oh yea, both of the other groups were serious buyers. Both commented “yes, everyone is falling out of escrow, that means the price is too high.” This was Palos Verdes CA, 90275.
Its not just us any more.
Got popcorn?
Neil
Wait a minute! They’re admitting they sold to investors? That’s funny. The oh so wonderful Portland prided itself on the fact that condo developers here weren’t making the same mistake as those in Miami, San Diego, and Los Angeles, i.e.- they wouldn’t sell to investors, only owner occupieds. Or so they said.
Fast forward 3 years and condos said to have been sold out show 30% occupancy by my admittedly non-scientific method of driving past them at night daily. What a joke.
What? The Pearl District of Portland is immune to infestors? It seems to me that virtually every high profile place in the West that appeals to coastal Californians is overrun. Bend, Ashland, Oregon Coast, Boulder, Tucson, Bellingham, Bozeman…etc.,etc. I would be shocked if the toney condos of the Pearl were not heavily marketed to SF and LA money.
See also: South Waterfront condos.
The SoWhat district? That will take ten years to build out.
“In these little teeny tiny letters it says it goes to an ARM after two years,” said Lisa Brain-Dead.
I can see a big arguement for requiring important “features” of any financial contracft being spelled out in bold easy to understand text so we can avoid the usual did not read the small print BS. I am not sure what made these idiots think they were getting huge loans with tiny payments and there was not a catch. I wonder if Lisa would be complaining if prices had continued to go up?
I predicted that eventually th government would mandate some kind of “Schumer box” or “nutrition facts” charts on the front page. Even a 30-year amort table would do wonders.
Also, some warning that there is no guarantee of a refinance or appreciation. Lots of people were told “they could always refinance.” Problem is, they depended on it.
I recently went to download RealPlayer to watch a video that I downloaded. I got to the EULA and started to read it. After a while, I just decided not to bother with RealPlayer or the video. When we got our mortgage, someone went over it with me page by page. Took quite a while because the document was huge. I don’t recall if it was the mortgage company or my lawyer or maybe both but we did go over it. That was a long time ago. Perhaps that doesn’t happen as it would just slow things down.
As for the guy that lost out on his condo and got his deposit back; I think he got lucky. Could have been one of those developments where the deposits disappear.
her loan broker, a friend, didn’t tell her the term would adjust.
with friends like that who needs a sharp, splintered stick in the eye.
It’s a new twist on an old story…Amway for home buyers… if you can’t sell to your friends, who do you sell to???
“‘I’ll keep struggling and make the payments or get a second job,’ she said. ‘I don’t want to lose my house. I can’t lose my house.’”
Since it was the friend who screwed her for a mortgage commission, this will will be interesting when it goes from denial to anger.
Got popcorn?
Neil
I am sure the standard line “you can just refinance next year and take a nice vacation” was used. That said, I doubt there are many buyers who were really as unaware of the terms of their mortgage, but rather a lot fewer who thought the market would collapse under it’s own weight taking them down along with it.
This is insane-making 22,000 she should’nt even have qualified for the 800 payment let alone 1400. Of course it was not her fault, the details were in “small print”, give me a break, I will cry you a river!
“I can’t lose my house.” Can’t? Don’t be silly dear, you can do anything you put your mind to. And you’ve done a terrific job of setting things up so that you’ll be sure to lose your house, soon.
Sounds like this airhead with her teeny-tiny brain and inability to read/comprehend the small print - ALWAYS the most important part of any legally-binding document - was probably brainwashed by all those “don’t dream it - do it!” realtor ads on the Oxygen channel or Lifetime. Wonder how many “friends” were accomplices in her assisted financial suicide.
“Too many people have tapped the equity in their homes and spent it rather than saving or investing. ‘Are we immune or do we have our heads in the sand?’ Flanigan asked. ‘Who’s to say?’”
Why, I’ll boldly step right up and say, this very minute.
Let’s see….hmmmm….
‘Nope. Spokane is not immune. And yep, you’ve got lots of heads in the sand.’
That wasn’t even very difficult!
“‘Nope. Spokane is not immune. And yep, you’ve got lots of heads in the sand.’”
Or at least in some dark place…
Looks like the NAR must have just sent out their latest list of sound bites their members can use. Until recently it was, “Now is a good time to buy.” That seems to have moved into second place these days. Seems the latest sound bite is, “Prices are stabalizing.” I suspect the NAR communication to it’s realtorwhores goes something like this:
Dear Member
We suggest our members stop using the “Now is a good time to buy,” sales phrase. It doesn’t seem to be working lately. Potential suckers - um, buyers - appear to have seen through that sales presentation phrase. Of course, it’s still a GREAT sound bite which worked really well over the last 6 years but we suggest, for a little while, our members switch to, “Prices have started to stabalize.” Of course, we suggest you do not abandon the good old sucker line, “Now is a good time to buy.” Indeed, we think in the coming months, you might consider combining the two sound bites thus, “Prices have started to stabilize and it look like a good time to buy.” If prices do level off in the next few months, those phrases should sucker in - um, help you complete a few sales before the next drop.
It will actually be interesting to see whether there are bumps on the way down. There was a bump on the way up: in many areas, 2001 marked a bit of a slowdown in RE. When I look at the old Credit Suisse ARM-reset chart, it suggests a false bottom could be reached sometime in 08-09; but maybe the slow progress of a foreclosure will just smooth out the decline and make it the steady downhill ride that Case-Shiller futures are predicting all the way out to 2012.
There was almost a bump in 2003, when they ran out of truly qualified buyers the first time. Then they let the lending standards go to heck, and it was off to the races again.
I am waiting for the class-action lawsuit against the NAR and CAR to get going. They had a clear conflict of interest and made outrageous comments when they clearly knew they were not true.
What conflict? What part of “National Association of Realtors” don’t you understand? That’s whose interests they represent, not anyone else’s.
They are also not a party to RE transactions so there is nothing to sue them for, any more than you can sue the NRA if one of its members shoots you.
“But what about the big picture? Condo tower construction cranes loom still loom over parts of the Pearl District. Does the Wyatt conversion signal a trend?”
“‘That was inevitable at some point,’ said Larry Brown, a city development manager.”
Everything is inevitable in hindsight.
‘Everything happens for a reason. So I’m very happy,’ [Lang] said.
Aaaargh. God, I am so tired of hearing that phrase. Of course everything “happens for a reason.” It’s called cause and effect. But people use it to mean “Everything works out for the best,” which of course it doesn’t. Yeah, Lang, thing’s worked out for YOU, but what about all the other FBs who are getting hosed? You think they’re placating themselves with New-Agey bullshit platitudes?
/rant
“things,” plural.
Ok, earlier this week I saw that Kroger profit rose 28%, and today I saw a headline about McDonalds sales rose 8.1% in August. The article on Kroger credits the improvements they made to their stores for the sales increase, and the one on McDonalds credits their new “healthier” menu choices for the sales increase. But me, I’m thinking these are signs that FBs and others don’t have the $$$ to throw around like they used to do. They still spend money but in different places now. Might be time for me to pick up stocks like this that do well in bad economic times…
From NYT “The Kroger Company said on Tuesday that its quarterly profit rose 28 percent, topping analysts’ expectations.
Kroger said it earned $267.3 million, or 38 cents a share, up from $209 million, or 29 cents a share, a year ago. Revenue in the period, which ended Aug. 18 and was the second quarter of Kroger’s fiscal year, rose 7 percent, to $16.14 billion from $15.14 billion last year.
Analysts polled by Thomson Financial expected a profit of 34 cents a share on revenue of $16.02 billion. Sales at stores open at least a year, considered a crucial indicator of a retailer’s strength, were up 5.8 percent including fuel, and 5.1 percent excluding fuel.” http://www.nytimes.com/2007/09/19/business/19kroger.html?_r=1&oref=slogin
McDonald’s Comeback Surprises Experts “The latest evidence of the brand’s renewed popularity came last week when the Oak Brook, Ill.-based company said August same-store sales rose a stellar 8.1 percent worldwide and exceeded the year-earlier total in U.S. restaurants for a 53rd straight month.” http://money.aol.com/news/articles/_a/mcdonalds-comeback-surprises-experts/n20070922125809990008
spam and other inferior goods- anyone have a line on the off brand cereal manufacturers?
Better yet, look at Whole Paycheck. Kroger is up; WFMI has been tracking down since ‘06. I wonder why…
My wife worked for an advertising agency on a fast food account. Her customers were the franchise owners, and everyone of them understood that quick serve always outperforms casual dining in a recession. It’s really interesting to see WS analysts ’suprise’ that McDonald’s has come alive. Why pay $12 for lunch when you can get the same calories for $5??? It’s amazing. Everytime my wife and I travel out of the country we try various local haunts for a good meal - spend over $100 in local currency and eat food that doesn’t beat our local joints in Long Beach… We always end up eating at McDee’s the last few days of every trip and save our big bucks for something fancy in Beverly Hills, or West LA when we return…
Can anybody say “RECESSION” all together now!
My wife worked for an advertising agency on a fast food account. Her customers were the franchise owners, and everyone of them understood that quick serve always outperforms casual dining in a recession. It’s really interesting to see WS analysts ’suprise’ that McDonald’s has come alive. Why pay $12 for lunch when you can get the same calories for $5??? It’s amazing. Everytime my wife and I travel out of the country we try various local haunts for a good meal - spend over $100 in local currency and eat food that doesn’t beat our local joints in Long Beach… We always end up eating at McDee’s the last few days of every trip and save our big bucks for something fancy in Beverly Hills, or West LA when we return…
Can anybody say “RECESSION”? All together now!
I doubt there is much the NAR can really do at this point. The speculators are gone, and the few qualified potential buyers remaining are not biting. I am not sure who is still buying today in bubble areas like CA and FL, but someone apparently is. I am really interested in seeing the new sales figures in the post credit crash era though. I suspect even on this blog, many will be surprised.
“Some potential borrowers, she said, are stuck in homes they expected to sell, because adjustable rates are no longer an option. A client recently pulled his house off the market in Gig Harbor, where prices aren’t keeping up, because he couldn’t get an adjustable-rate loan that would make up for the equity he’d lost, she said.”
sounds like a flipper. ha! ha!
guess this leaves Wyoming as the final hot spot- but only if you can see an active rig
Remember that Jackson Hole article with the crazy speculation?
this may seem to be off topic but I suggest people set aside two hours to watch this because its long and may explain most of the actions of today and past will lead to this. We the Americans, are debt holders and anyone that tells me to buy a house can kiss my rear end. I must make plans to leave this country because our emotions are used against us. Good luck to all and I hope you all can open your eyes to what will become of next generation.
http://www.zeitgeistmovie.com/
“Spokane keeps waiting to see if the credit crunch afflicting the mortgage industry across the country will spread to the Northwest.”
Spokane is going to get throttled. The speculators from western WA flocked there in droves, driving prices far above what they were/should be. Wages in Spokane are paltry, and unemployment can run well over the national average. I see pain on the horizon there…
Well…for the last few years Spokane has had an economic “renaissance” probably related to real estate bubble. Of course the populace has their heads in the sand—because they thought that housing was so undervalued before. The last time the economy was this strong in Spokane was early 1900’s with the railroads and mining. Hahaha..but now it is strong due to housing and a service based economy. The number one employer in Spokane is the air force base, followed by Sacred Heart Medical Center and next maybe School District 81. Move here and bring your own job!
I really wonder how Sandpoint, Idaho properties and Coeur D’alene waterfront property values will drop after the mania subsides. Developers are destroying the Inland Northwest’s natural beauty.
“I really wonder how Sandpoint, Idaho properties and Coeur D’alene waterfront property values will drop after the mania subsides. Developers are destroying the Inland Northwest’s natural beauty.”
Prices are headed in one direction fast; down. It’s time for many in the industry to trade in the khaki pants for a darker shade of brown, if you know what I mean. I can only conclude that many spec builders/developers and spec banks are going to eat large sums of cash, as the buyers they were hoping for simply don’t exist at their price points.
Yes, the toll on the natural resources is heavy, and one that cannot be reversed. I’ve come to despise many developers, as a result. I only hope that a good lesson is learned, but I’m not sure it will be. Greed knows no bounds.
On my last trip through Central Washington, I saw dozens of tightly-packed, partially- constructed housing developments in the Moses Lake/ Ephrata/ Othello region. For outrageous prices. This are is high-plains dessert. A several hour commute from Seattle in the best of times. I expect these ’starter’ home developments to be doomed. I’ll bet they never completely sell, at any price.
““Too many people have tapped the equity in their homes and spent it rather than saving or investing.”
Wait, wait, wait. Is this idiot actually suggesting that people take out a HELOC to put into the market? It’s slightly smarter than pulling out the cash to buy a Hummer (which can only depreciate), but taking out a HELOC at ~7.5% in the hopes of being able to beat that spread on the market is playing with fire, IMHO. Are they also buying on margin?
New paradigm?
Hey, on another thread right here on the HBB today some clown was saying he wished he wasn’t so debt adverse because it would have been a smart move to out a heloc and invest in short term CD’s.
Hard to see how it would work. I think all HELOCs have adjustable rates. Maybe he meant he wished he’d taken a larger fixed-rate loan when they were cheap.
Nope, it was as I said. I thought it was crazy because who knows where CD rates are going. Not too long ago the best CD rate I could get was 3.89% and I go in to the bank armed with my list from bankrate.com. I usually do pretty well too. Last thursday I got 5.30%. Dividends on CD’s are taxable too. Seems like a lot of hassle for little if any returns. Potential downside is pretty big if you ask me.
Went to some open houses today. Here in Sioux Falls housing is low in price by most people’s standards but to me it is ungodly high. The building here is unbelieveable; we’ve probably added on around 4000 - 6000 houses in this area since 2003 (in a city of around 155K). The houses I toured were brand new McHouses (not really that large) starting at around $200,000 USD. Understand that the vast majority of jobs in this area pay $8 - 11 per hour. Even if you have a married couple or whatever buying, they really can’t afford the house under normal lending standards (yes, they are pushing weirdo loans out here still, SD banking laws are very lax). Even with the weirdo loans, you don’t buy much of an advantage. The super low down payment option ($67 down, no joke) was a monthly payment of 1200 just on the house alone. If you put 20% down, they had $993 as a monthly payment. Consider that this is a difference of $200 per month just on principal. The total payment including taxes and the bank’s “mortgage and hazard insurances” was $1643 on the low-down payment option and the 20% down payment loan was $1310 including the taxes and BS insurance. The stupid bank/loan shark/pawnshop/whatever that was writing the loan was charging all kinds of BS closing fees and open fees and God knows what else, almost as high as a down payment. I’m not going to consider a bank when I buy a house, believe me.
This brings me to another observation I have about the housing bubble. Judging by the types of individuals moving into this town, I’d say that most of the housing bubble growth in America is indeed because of demographics changes (outside of hyperinflation of credit and rampant fraud). I think the housing bubble is a reaction to the 2000 elections. I think the tension from that event has caused a lot of people to reconsider their goals and such in life, and I think that people are moving to areas of the country they have more in common with. That could be why states like MA and NY are losing population; many people relocate to areas of the country where they have more in common with the locals (perhaps that’s why NC and ID have rapidly grown since 2000). I think much of it is politics; I will agree with whoever said that the majority of the USA is “Bush Country”. Problem is, “Bush Country” won’t be running the world anytime soon. In fact, I think this type of person probably will be lucky to eke out a living in a few years. Why? I think the USA as a country is done for in 5 - 10 years. To make a long story short, we have an unsustainable economic policy, a US government that is too large, intrusive and corrupt, an inflexible and largely ignorant public, and unrealistic political goals and regional tensions.
For those of you who think that by moving to SD or ND or any of the rural states, don’t assume that you will do better here. From the data and information I have seen, the US government will likely melt down sometime in the next 2 - 5 years. We have an enormous national debt that cannot be paid back even under the most draconian terms, and just like the Roman Empire, the US government will choke on it’s own weight. That’s all that would happen. When that happens, I think the states will simply go their seperate ways. Problem is, the shock of such a “meltdown” will likely throw the states off, and some of them won’t recover. I have very little optimism for the western states; most of them are heavily subsidized by the federal government, they are no where near as self-sufficient nor are their cities and peoples as civil as the media and survivalist nutjobs try to make them out as, and we likely will have a much drier climate in the next few years. If you are in the Western USA, the only area that will hold up at all would be in western WA, western OR, or the northern CA coastline and small parts of the Bay Area. Otherwise, everything, from eastern WA, eastern OR, most of CA, and everything east to the Dakotas, Nebraska, Kansas, Oklahoma, most of Texas with exception of Houston, and western IA, MO and AR won’t be very good places to live at all. Also, I would leave southern FL, the New Orleans area, any Rust Belt city larger than 140K, and the Washington DC area. These parts of the country simply won’t hold up in a world where Washington DC isn’t able to help them anymore. The ideal place to be would be in a smaller town in any area outside of the places I described here since the big cities might get ugly temporarily if this housing bubble blows up like I think it will. Don’t worry, the gun-toting rednecks and their ilk won’t be able to bother you since they will be too busy hunting for gas.