It’s Very Reminiscent Of The Late ’80s
The Boston Business Journal reports from Massachusetts. “A report issued Monday on the Bay State housing market finds sales dipped in 2007 to their lowest level in over a decade, but a separate group contends that the year was still strong when based on historial figures. There were 50,435 single-family home sales in Massachusetts last year; about 5,000 fewer than in 2006, and the first time since 1992 that sales were that low, according to The Warren Group.”
“Single-family home sales in 2007 fell 8.4 percent from 55,054 in 2006 to 50,435. During December, sales continued the sharp decline that has been evident in every month since September, and fell 23.3 percent from 4,074 in December 2006 to 3,123 in December 2007, the report stated.”
“The median price for single-family homes in 2007 also declined, falling 4.6 percent from $325,000 in 2006 to $310,000. The median price of homes sold in December saw the largest drop all year, falling 10.5 percent from $309,000 in December 2006 to $276,568.”
“Another report from The Massachusetts Association of Realtors, which does not include homes listings that are for sale by owner, painted a more optimistic picture.”
“‘There is no question that 2007 was a challenging year for the real estate market for many reasons, yet people continued to buy and sell homes on a daily basis,’ said MAR President Susan M. Renfrew. ‘When you take a step back and look at the year in historical context, it was actually pretty good.’”
The Boston Globe from Massachsuetts. “Homebuyers lured by cheap prices took Route 2 into Fitchburg and Leominster at the height of the housing bubble a few years ago. Longtime residents displaced by those newcomers followed Route 2 west to buy homes in rural towns like Athol and Orange.”
“Now the towns along Route 2 and west of Interstate 495 are among those with the highest rates of foreclosures in Massachusetts, according to the Warren Group.”
“‘Our incomes here are much lower than they are in the Boston area. People were stretching to buy homes,’ said Mark Dohan, director of the Twin Cities Community Development Corporation in Fitchburg.”
“In 2006, for example, the Fitchburg-Leominster region had the seventh-highest number of subprime mortgages in the nation, 187, that went delinquent just three months after the borrowers closed on their loans, a Mortgage Bankers Association study released last year found.”
“‘People bought their homes and immediately stopped paying for them,’ Dohan said.”
“‘You see rising foreclosures because of falling house prices,’ said Prabal Chakrabarti, director of community affairs for the Federal Reserve Bank of Boston. ‘People borrowing to the margin and people lending to the margin, that’s the population that, when house prices go down, goes into foreclosure.’”
“In 2002, Christine Mackie bought a 150-year-old, two-story Cape with an attached barn for horses in Townsend on the New Hampshire border. Her mortgage was $178,000, but as the years passed, the house skyrocketed in value and she refinanced twice, to $268,000, to generate extra cash from her equity.”
“When Mackie split up with her boyfriend in 2006, she realized she couldn’t handle her $1,750 monthly payments alone. Her mortgage holder, Ameriquest, agreed to not bring a foreclosure and ruin her credit, if she could sell the house. In late September, she found a buyer who offered $245,000.”
“Mackie spent around $40,000 renovating it with her partner. At first she listed it for sale for around $330,000. Eventually Mackie lowered her asking price, to compete on a glutted market. And when the time came to finalize the sale, the bank made sure she had been tough in negotiating the best possible price.”
“‘They wanted us to prove that we were trying really hard,’ said Mackie. ‘It was close to a year at this point.’”
The Enterprise from Massachusetts. “Bargains abound as developers respond to a slumping market by slashing prices When the downtown condominium lofts started selling at SoCo146 a year ago, the highest selling price for a two-bedroom, two-bath unit was $214,900.”
“Those units on Court Street are now selling from $165,900 to $182,900, and developers say the drop in price is due to a slumping real estate market.”
“‘We’ve had to respond to the market. We had to. We’re doing what the market is telling us,’ said Ellen S. Goldberg, a spokesman for Cathartes Private Investments, which co-developed the SoCo146 property.”
“And in the last week, prices on the units have dropped anywhere from $3,000 to $6,000, said Gail Carter, on-site broker.”
“What is happening in the downtown condominium market is reflective of condominium sales overall, local Realtors say. ‘Citywide, countywide, statewide — condominium sales and prices are down,’ said Bernie Hassan, manager of Weichert Realtors-Briarwood Real Estate in Brockton.”
“‘The saturation in the market place is the reason probably as to why the prices have come down,’ Hassan said. ‘That would be right cross the board in real estate right now.’”
The Metrowest Daily News from Massachusetts. “Whatever the state of the economy, one thing is clear: consumers are thinking twice before opening their wallets.”
“Michelle Walker of Natick said she’s cutting out the family’s annual February vacation because of of travel costs. ‘Wages don’t seem to be keeping up with inflation,’ she added.”
“‘We’re in for a tough retail stretch here,’ Jon Hurst, president of the Retailers Association of Massachusetts. ‘There are a lot of similarities to 1991 with what’s happening in the real estate market place. It is so much of what drives consumer sentiment and how positive they feel about their short and long term, because for most people, their number one asset is their home.’”
“Natick real estate agent Andy Luke of Re/Max Home Finders said the housing decline has thinned out his industry, with colleagues and related mortgage consultants leaving the business. ‘I’m enjoying the shakeout in a way, because those agents who shouldn’t have been in the business are leaving,’ Luke said.”
“People who could have sold their homes for $500,000 are now competing with bank-owned properties down the street that are selling for $480,000. That’s what’s driving price declines for home sellers, he said.”
The Hartford Courant from Connecticut. “Petra Unander, who lives in a spacious, four-bedroom colonial in a scenic subdivision high above the Naugatuck Valley, can tell you exactly when she realized for sure that she was slipping out of the middle class.”
“It was three weeks ago, on Jan. 4 — the day her latest bills arrived from Connecticut Light & Power and Yankee Gas.”
“‘I couldn’t believe it when I opened those envelopes, because my CL&P bill was $221.15 — $30 more than the month before; and my gas bill was $292.33 — $110 higher than the month before,’ Unander said. ‘With programmable thermostats that keep the house at 57 degrees all night, and no lights on during the day, I thought that my bills would be going down by now. But I’m just falling behind every month.’”
“So, Unander did what she often does in a pinch — she called her close friend and neighbor, Rachel Huzior. Huzior, a compulsive budgeter and frugal with her money, would be able to tell her what she was doing wrong. ‘Well, I nearly had a heart attack when I talked to her, because Rachel’s utility bills were even higher than mine — by $150,’ Unander said.”
“Unander and Huzior were, in a sense, already economic refugees when they met after moving to Naugatuck. In 2005, both had ’surprise’ third children after they thought their families were complete, both needed larger houses and both migrated to the Naugatuck Valley to take advantage of better housing values.”
“Housing prices in the Fawn Meadow subdivision are in the $400,000 range. The Unanders and the Huziors both are in a supposedly comfortable, almost-six-figure income bracket, and Petra earns extra money by running a home business.”
“While transferring money from her savings to her checking account to cover the escrow, Unander realized she had crossed a new financial threshold. In November, Roger Unander’s first paycheck no longer covered the mortgage, and Petra began borrowing from savings to cover it, which she now does every month.”
“‘Some of my friends who live in smaller houses down the hill think we’re rich,’ Unander’s son, Chris said. ‘But I tell them, no, I’ve got to wear my hoodie inside all the time. I’m very aware that my parents are always trying to save money.’”
The Union Leader from New Hampshire. “Personal bankruptcy filings in New Hampshire jumped significantly last year, and bankruptcy attorneys say the mortgage crisis is driving much of that increase.”
“Nearly 3,000 Granite Staters filed for bankruptcy last year. And the number of individuals trying to repay their debts through bankruptcy — known as Chapter 13 filings — is at the highest level since the modern Bankruptcy Code was enacted in 1978.”
“Richard Gaudreau, a Salem attorney who specializes in consumer bankruptcy law, said the mortgage crisis is driving the increases in both Chapter 7 and Chapter 13 bankruptcy filings.”
“Typical is the couple he met just Friday, who fell behind when their adjustable mortgage interest rate went up. ‘They’ve got a house they can’t sell, they can’t afford,’ he said. ‘What do they do? They’re facing a $50,000 mortgage deficiency and they’re filing a Chapter 7.’”
“Gaudreau said he’s been turning away clients. ‘I don’t have the staff or the time to handle everybody who needs to file,’ he said. ‘It’s very reminiscent of the late ’80s, early ’90s, when the mortgage market was crashing. The market’s adjusting, the bubble’s burst and everybody’s trying to go pick up the pieces.’”
“Concord attorney Mary Stewart is also handling more Chapter 13 bankruptcies. ‘It’s because of housing,’ she said. ‘They’re in default on their mortgages and they’re trying to catch up. It’s people who have paid their bills all their lives, and they’re humiliated to be sitting in my office.’”
“‘It’s not deadbeats. It’s happening to people who never thought they would be here,’ she said.”
“Gaudreau said some of his clients seeking bankruptcy protection are themselves working in the housing industry. ‘I’m seeing appraisers, real estate brokers, mortgage brokers, so many contractors. All these people are dependent on the real estate market and it’s having a domino effect.’”
“Londonderry attorney Nancy Michels said most bankruptcy cases she’s currently handling are mortgage-related; some people are ‘just walking away’ from their homes.”
“It’s rare to find someone with a subprime loan who understood what they signed, she said. ‘I have professionals who have gotten themselves into these mortgages who are clearly very bright people, and they just have no concept of what they’re really gotten themselves into.’”
The Nashua Telegraph from New Hampshire. “At first, a four-bedroom ranch on Belmont Street in Merrimack with a walkout basement and recent upgrades was on the market for $259,900 – just what the seller needed to recoup what she owed.”
“But when the property didn’t move right away, and taking the vacant house off the market wasn’t an option, the owner steadily lowered the price, said broker Richard Jean.”
“It took six months and more than $50,000 in price reductions, but there’s finally a pending sale – for $204,900. ‘It’s called a short sale,’ Jean said. ‘That’s what it took to get it done. And the house is in very good condition.’”
“Flash back to just more than two years ago, and this house probably would have sold quickly and close to asking price, Jean said. That’s when the market in southern New Hampshire was hot.”
“‘You can’t expect the market to be the same way it always had been,’ said real-estate agent Lisa Waller, of Nashua. ‘I can tell you, the media has sensationalized it. New Hampshire’s really not doing that bad.’”
“According to new figures from the New Hampshire Association of Realtors, single-family home sales in Hillsborough County took a double-digit hit for the second year in a row in 2007. Sales prices also dropped, but only slightly.”
“After a surge in prices from 1998 to 2004 – when the average home doubled in value from $127,500 to $254,702 – the market peaked in 2005 and has since retreated, according to the Association of Realtors.”
“All of this is a problem for potential sellers who don’t have a lot of equity built up – namely because they purchased a property at peak price just a few years ago and the house is worth less today.”
“‘The biggest problem today is somebody having to sell something in order to buy something,’ said Dave Moran, associate broker in Nashua, adding that more buyers are requesting contingency plans that allow them to back out of a purchase if their home doesn’t sell.”
“But there’s plenty of good news in this market for first-time buyers or anyone who doesn’t have to worry about losing money on a sale. There are plenty of houses to choose from in the Nashua market, and they’re often selling below asking price.”
“Waller said she just closed on a home that went for nearly $100,000 less than the seller originally wanted.”
‘I couldn’t believe it when I opened those envelopes, because my CL&P bill was $221.15 — $30 more than the month before; and my gas bill was $292.33 — $110 higher than the month before,’ Unander said. ‘With programmable thermostats that keep the house at 57 degrees all night, and no lights on during the day, I thought that my bills would be going down by now. But I’m just falling behind every month.’
I see this more and more, with gasoline costs, too. For those that believe in an all-powerful Fed, that can inflate the housing bubble away at will, consider that millions of family budgets would turn upside down. And foreclosures would soar even higher, IMO.
The Fed is driving energy costs by depreciating the dollars used to buy energy. How low can they go before people have to wear hoodies to bed?
Heh, that brings back memories of an up and down dump of an apartment that I rented while attending undergrad in Upstate - save for a hole in the floor topped with a grate, there was no heat on the second floor where the bedroom was. The windows were sieves and I put plastic over them - the plastic billowed out like sails on a boat and did not seem to do much. It was so cold that I had to wear a skiing hat to bed. I think I spent a lot of time on campus that year - in the free and heated library.
A few years back, my wife and I lived in a 3rd story apartment carved out of an old home in historic Bozeman, MT. THis unit had electric baseboard heat (expensive) but because it was on the third floor we got a lot of heat from the units below. So we decided to go as long as possible without turning on the heat.
In the end, we made it through the winter without using heat except for one of those electric oil-based radiator things that we would roll around from room to room as necessary. In the worst weather it got down to the high 30’s inside the apartment, but most of the time it stayed in the upper 40’s to low 50’s… cold but tolerable. We did sleep in long johns and knit caps every night.
Sorry NOT my idea of snuggling up to my GF…..I don’t mind it cold during the day, but at night my sinuses get all clogged and i get dry mouth if its even below 60. But Most older spring type thermostats cant do this… Hint: Carbonated water seltzer soda with no sugar solves the problem…
———————————————-
We did sleep in long johns and knit caps every night.
When I was an undergraduate in Portland, OR, I lived in a house where, if I wanted heat, I had to go down into the basement and shovel coal into the furnace. Rent was something like $50/month. In the mornings, I froze. My poor impoverished mother saved S & H Green Stamps to buy me an electric blanket, but a couple of days after it arrived, my roommate’s cat peed on in and shorted it out.
It’s 66 degrees here with the windows open and I was a bit cool at first but adjusted and love the reprieve from the heat. When I move north, ill be heating the house to 60(just so the pipes don’t freeze) and I won’t be cold even though I wear just shorts, no shirt.
I will be visiting Toronto next month and see what 10 to 40 degree weather with plenty of snow(I hope) feels like! Is Toronto still cold in mid to late Februrary?
Is Toronto still cold in mid to late Februrary?
Your question should be whether Toronto ever gets warm even in July.
Thanks, you just reminded me to turn the heater off!
Toronto is balmy in February, but the high humidity can be tough to take. Be sure to pack your flipflops and plenty of suntan lotion as the sun is intense.
I turn my programmable thermo off at night. It can get pretty chilly by morning, but I like to sleep, rather than hear the furnace powering up in wee hours.
heat is included in my rent so we stay pretty warm
but those energy bills are the things many fb’s fail to realize come with their american dream
Back in the early 80’s we rented 3 more years than we planned on, because our rent was $150 a month, with utilities covered, and utility bills on anything we bought would have been higher. Plus we would have had a payment, taxes and insurance on top of that.
You turn it off or you program it not to come on? If it’s programmable, then program it to turn on 15 minutes before you get up.
The way I reduce an ever-increasing electricity bill is by “rolling my own.”
I have a lot of training in electronics, and decided that producing electricity was easy as hell. Everytime I would hear the stream across my propety running, I would think about how easy it would be to tap into all of that energy. Now about a third of the electricity to run my house is homemade; the result of the micro-hydro system I designed. Now I’m thinking about replacing the other two-thirds dependency on the electricity company with wind and solar power. (I realize that not everyone has a stream running across their property, or reliable wind or sun — but I hope I have gotten a few of you-all thinking about other ways to produce electricity.)
“Now about a third of the electricity to run my house is homemade; the result of the micro-hydro system I designed.”
Wow! Great idea. If you ever decide to market these, let me know. We have a couple of streams that might be suitable. We’re getting solar panels on our roof next summer. Would love to be completely off the grid at some point.
Appalachian State University here in Boone has a real good alternative energy program — in fact, you can get a degree in AE.
My goal is to be 100% self-sufficient when it comes to electricity. I”ll probably, however, have to stay on the grid because of my wife’s oxygen machine.
So what backup for the oxygen machine do you have if/when the grid fails?
ahhh yes… heating. I lived in Boston for three years. All the places I lived in were old rattly buildings with no insulation. The windows were old, single paned, and leaky. One place I lived in came with heat, but it was in the form of a massive radiator in the room. The apartment was 85-90 degrees all winter, even with the windows open and the value shut off. Pipes ran through the walls, so even if the radiator was off, it was still like a sauna. The second place I lived in you had to buy the heating oil. As Southerns unaccustomed to longer winters, the oil rain out in March-Early April. It was getting warm, so we said the heck with it and didn’t refill. The next week it got down to -10 degrees. Oil also shot up to 75 cents a gallon. The house got so cold, the toilet downstairs froze.
Miserable weather. I promised myself I would NEVER live anywhere north of North Carolina. That January, I moved to California. 60 degrees in January! We barely use the heat here and seldom have bills over $45 a month for gas, maybe $35 for electric.
In regards to the Fed, well as we can see, Wall Street is like a crack addict and ‘hoping’ for another cut. What a clown of an economy we have these days when the only real activity is more to do with a bunch of babies being pacified by the Fed while the rest of the country pays for the price of inflation
You can keep bottled oxygen around as a back up.
“So what backup for the oxygen machine do you have if/when the grid fails?”
Wouldn’t you be ok with a simple gas run generator? Lots of people have ‘em up here (CNY) We’ve got a nice John Deere packed away with the rest of our stuff in storage.
Real Goods has books on hydro plus all you need to do it, if you have a stream. I think they have a web page (realgoods.com, can’t check right now). They also have solar, etc. Prob not the cheapest around, but will give you ideas.
The Federal government, despite assurances that they want to keep housing “affordable”, is doing everything in its power to keep prices elevated. Not just housing, but everything else because it is pursuing an inflationary policy, a kind of ’silent’ tax that will likely be more and more regressive if wages stay flat.
The other thing you don’t hear much about is how global oil reserves are dwindling. Even if the economy kept purring along, energy costs will slowly keep drifting upwards in real dollars. Energy is likely to replace Housing as the next inflationary bubble.
Bingo.
I’ve noticed my food bill has gone up about 20-30% a month. Not only are prices way higher on every single item, but you have to buy more because the packages are much smaller.
IMO it’s because of gasoline. Pay isn’t going up, so something has to give.
Agreed… they have to ship the items to the stores which takes transportation. The store has a high electricity bill also.
And Jim Cramer has the nerve to say inflation is being caused by energy and the FED cannot control that so they need to cut rates.
Jim, energy is up BECAUSE of him cutting rates. These people try to justify any reason for a rate cut while trumping any reason to not cut.
“The store has a high electricity bill also.”
I’ve always wondered what groc. stores could save if they’d put doors on their open coolers (where you get meat, cheeses, etc.) What a waste of energy. You walk into that section of a store and need a coat.
I recently read that oil going from 50 bbl to 100 bbl creates a 4 - 13% increase in food prices. Sorry, no source. Grain o’ salt then.
America eats imported petroleum, in more ways than one. Costs over $500 to fill the tanks on a semi truck (getting 6 miles/gallon on a good day) hauling food to your grocery stores. Years ago it was cheaper to ship food by diesel trucks than by trains, now the ratio has reversed. Now the domestic capacity of the rail system to ship food has become inadequate, and many rails have been removed to create hike-and-bike trails.
Don’t forget labor costs. 100 trucks need 100 drivers, 100 car trains move with a two man crew nowadays - even with crew changes (instead of rest breaks for truckers) the time and labor savings can’t be ignored.
hike and bike trails were used on inefficient lines that duplicated other lines. just competition.
What would be great is if the government would get serious about putting money into upgrading rails all over the country… thus getting more efficient.
we dump tons of money into the interstate highway system and the airlines. the railroads have been the wicked step children of the transportation sector for decades as long as the feds are concerned.
we also need more federal funding for hot air balloons (tongue in cheeck)
still recovering from out january tornado in wisconsin
What would be great is if the government would get serious about putting money into upgrading rails all over the country… thus getting more efficient.
As oil will continue to become more and more expensive, perhaps people will start considering the train again, especially of the new trains are modern, high speed jobs.
“What would be great is if the government would get serious about putting money into upgrading rails all over the country… thus getting more efficient.”
Since I hate airlines… I’d back this 100%.
If you buy a lot of “value add” products, the cost includes labor (production, marketing) and gas (production, transportation.)
Local produce has hardly budged an inch. For those that cook costs haven’t risen nearly as much. Even grocery produce hasn’t risen that much.
Just a modest dissenting opinion.
I’d guess that’s more because of the local growers not really understanding the forces of inflation and pridefully keeping prices the same, despite all indicators to the contrary.
No, because they have a choice between selling it and making some money, or not selling it and making nothing at all.
Why is this basic economic fact so hard to understand? Sometimes the smallest loss may be the best one of all.
(Just for the record, I do not believe they are making a loss. Just not as large a profit as in the boom years.)
Why pray tell, are all other foodstuffs rocketing in price?
Because they have an embedded cost of gas in them.
If your asparagus comes from Chile, and your tomatoes from Israel, you can bet that the dominant cost is not the cost of production but the cost of transportation.
Ever wonder what fertilizer is made out of?
Poop?
Nope, guess again (think Dow Chemicals).
“Ever wonder what fertilizer is made out of?”
Nitrate fertilizer comes from ammonia
Ammonia comes from Haber process (nitrogen from air plus hydrogen)
Hydrogen comes from natural gas…
Higher oil prices are part of it, but the whole ethanol fiasco is probably a bigger part of the increase in food prices. Grain prices are driven up by the ethanol-driven demand for corn. Grain is used to feed animals, hence a rise in meat, dairy and eggs. There is most of our food right there.
ps–I don’t shop regularly anymore as my wife is staying home to take care of the kid. She is out of town so I went shopping yesterday and could hardly buy anything the prices were so shockingly high. Even eggs! Eggs used to be “cheap protein”.
Eggs have more than doubled in price at places like Sam’s Club.
Here is a tip…..C-Town is usually located in poorer/ghetto/latino type areas, and service WIC food stamp people, so a lot of basics are 20-40% cheaper…hamburger $1.89 vs $2.99 eggs are $2.19 vs over $3 at Foodtown just 6 blocks away. milk is 25 cents cheaper and they always seem to have 99 cent cream cheese. Just takes a while to get used to the Spanish music blaring from the speakers
Tyson adds to the inflationary cycle:
Near record-level costs for corn and soybean meal is taking its toll, and Tyson said it plans to raise costs for its chicken and beef products that account for 78% of its total sales.
“We have no other choice but to raise prices substantially,” CEO Richard Bond said in a conference call. “We are raising prices because we can’t absorb these costs.
Good pickup. This is all because the FED is trying to prevent another recession and is thereby threatening every person in this country who needs to eat and every senior whose savings are being made worthless.
“Near record-level costs for corn and soybean meal”
No, this is happening because George Bush decided to pump federal subsidies into ethanol production. Of course ethanol production (start to finish) consumes almost as much energy as is produced, this is NOT a solution to global warming or energy dependency. But these subsidies to make those midwestern farmers and senators happy.
I’m really surprised that the AARP hasn’t gotten very vocal on exactly this point. Bernanke’s inflationary moves have thrown seniors and anybody else on fixed incomes under the bus in his attempts to prop up equity values for his banking buddies. Any thoughts on why rising energy/food/medical costs, and their effects aren’t being highlighted more in the MSM?
It’s the War On Savings! Keep spreading the word that the True Victims of the subprime mess aren’t those FBers with their sob stories; the True Victims are the tiny fraction of Americans who have money in the bank.
I so hate the focus on “fixed incomes” and “seniors”. I work for a living (yes, yes, despised wage slave). When prices go up, my paycheck does not. I might or might not get a COLA. My income is as fixed as a senior’s, and I have more expenditures, since I have to buy gas to get to work each day. (I work in WY, there is no such thing as public transportation).
Inflation affects just about everyone, and workers for wages (especially without wage inflation) do NOT have it better than retired persons.
I think the obsession with “fixed wage” seniors goes back to the days when almost all J6Ps were paid hourly wages, and could put in some overtime if things got tight. Of course now many J6Ps are paid a fixed salary.
Guess it’s more normal for seniors to use CDs and Mmkt, but I laugh when I think of my dad still trading through his 70s, then as he got more disabled he let it all ride on tech stocks and then finally all Fidelity Contra, and made great money all through the 90s boom.
“Near record-level costs for corn and soybean meal is taking its toll…”
Soybean candles are very popular as they’re “green” as opposed to parrafin based candles and burn much cleaner. Candles account for $2 bil in sales annually in the US, don’t know what percentage of that is soy, but it’s high.
My favorite Barilla pasta now comes with just 14.5 ounces per ‘one-pound’ box. Toothpaste tubes are getting shorter, too.
I remember this happening when I was a kid in the 1970s. Mad Magazine pointed it out.
A friend turned me on to this excellent website that chronicles the prices of everyday stuff we buy, over the past century…
http://www.gti.net/mocolib1/prices/index2000.html
Well Excuuuuuse me: 4 bedrooms on an open windy hill. This should NOT have been a surprise.
And $221 is a Lot for electricity, ours was over $100 in NYC but then we keep 2-3 computers on almost all day plus lights etc…..
===========================================
Petra Unander, who lives in a spacious, four-bedroom colonial in a scenic subdivision high above the Naugatuck Valley,
Thats why I want to buy lots of land so I can grow a big garden and orchid of apples, peaches, plums, blueberries, etc. Will cut my cost of food in half with a good harvest.
You don’t even need lots of land to grow a big garden and an “orchid” of apples, peaches, plums, blueberries, etc.
My former neighbor did all that, plus he had his own beehives, on two acres. But then he was an old NC transplant who came north for work. He grew up on a farm and had a jumpstart on knowing how to work the land.
Bye, for future reference, it’s “orchard”. OR-CHARD. At first I thought you were talking about growing orchids.
(There’s a big difference between orchids and apple trees.)
Bye needs to get some real gardening experience before he/she buys a big farm.
I’m really mad at my parents now. They’re sending their keys back to the bank on a home they’ve refi’ed and heloc’d the hell out of, and due to divorce, can no longer afford the new higher payments and in the glutted So Cal market can’t sell it off.
I’m really pissed off at them because it was a really good piece of property that they bought cheaply with a historic home on it (used to be an old railroad station), a couple acres of land, with an established fruit orchard on one of the acres. Oh man, I’d be in heaven if I could have gotten the property today at what they did when they bought it (100K range in the past). Not only would I have a cute tiny home, but a fruit orchard to live off of as well! What a shame this property is going to waste, and no, I AM NOT bailing them out for what they owe on it.
could you buy it from the bank?
“Thats why I want to buy lots of land so I can grow a big garden and orchid…”
Completely off topic, but did you know that the word ‘orchid’ comes from the Latin word (orchis) for testicle? I’ll bet that is a fact you could have lived without…
Our thermostat was set at 65 during the month of December. The oil bill was over $500. In late Dec./Early January I turned it down to 63/64, the bill was just over $400. Now it’s set on 62. We’re paying $3.50 or so a gallon. Reading what other people are doing, I think we might try going to 60, see what happens.
‘I couldn’t believe it when I opened those envelopes, because my CL&P bill was $221.15 — $30 more than the month before; and my gas bill was $292.33 — $110 higher than the month before,’ Unander said.
How the heck does anyone have a $200 electricity bill in December? Depending on your part of the country, that’s more like an August bill. Either something aint right with that house, or CL&P is charging ridiculous rates for electricity.
McMansion??
It’s a 4 bedroom colonial — hardly what I’d call a McMansion.
Ah, but a rowhouse in the place with the highest energy costs in the country costs about $80 per month for electricity (with an electric dryer) and $200 per month for gas (with gas heat, hot water, stove) in winter. About $30 per month in summer. That’s with four people. So that’s $280 per month, max.
And, there is no lawn to mow, and the exterior is mostly brick, so there is little need to paint.
I thought about operating costs and maintenance effort very carefully when deciding where and how to live.
rowhouses are energy efficient if they have shared party walls. You only have heat loss at the roof and on the frong and back side.
Her combined gas/elec for that month was $331. That doesn’t sound high to me. National Grid had us on the payment plan—flat rate every month and about a year ago we were paying $285/per month for a 2200 sq foot colonial.
We don’t air condition in the summer and I’ve only got 1 computer. I have those energy efficient light bulbs everywhere and my husband also pulled off all the window trim and stuffed more insulation in. The thermostat was kept at 62 day and night. If we were cold, we put on a sweater and some heavy duty socks. (Wood floors are cold when you don’t have a finished basement)
So you can extrapolate and figure if my low summer use didn’t keep the monthly payments down, my peak month would have been close to $400 if not over. (I did see one of those bills before going on the plan a few years back)
Before my friends bought their woodstove last year, they were sometimes paying over $1000/mo to heat their 200 year old brick federal. The thing leaks like a sieve, they’re exposed to some nasty wind speeds on the hillside they live on and outside Syracuse we generally are good for a few below zero weeks.
We locked in the price of electricity for the rest of our lives, this summer.
(full disclosure: this message was brought to you from the energy of the Sun)
And she was.
An she says that she doesn’t run any lights during the day…
All of New England charges ridiculous rates for utilities, IMO.
I lived in Southern tier of NY state and also on Long Island. Now I live in Mesa, AZ.
Yes, utitities were MUCH MORE expensive in the Northeast. Also remember, some people run electric space heaters in addition to gas or oil heat back there. Also some go in for big Christmas lighting efforts in December then the bill comes in January like it did for that gal.
Yes, before these FBs go beating up on the utilities for their misery more needs to be known about their usage patterns and the construction/insulation of their dwellings.
It figures though that utilities will come under fire - more “victim” stuff. Add them to the list of bogeymen responsible for the fact that J6P can’t stay out of the stores.
13cents/KW for our waking hours on a day/nite meter. Utilities in northeast are a massive rip off. I’d say that electric heat is now as cost effective as fuel oil at a rate of $3.50/gal. Whats better is electric is 100% efficient unlike oil at 88% at best.
My highest electric bill ever was this month at $229 for a 2000 sf house. Everything is electric so we have no other utility bills. We live in NE Ohio and it’s been cold. We did have the house built 20 years ago and did double the required insulation in walls and attic, plus 2 x 6 studs.
No boiler maintenance and water conditioning required. And at $6/ft replacement cost, I’ll take electric in a structure with core-fill insulation all day long. Boilers are a pain in the ass, noisy and stink not to mention the capital costs.
I just paid 8.4 cents/kwh for last month’s electric bill here in NE Ohio, from a municipal system. Investor-owned electric companies charge more, but I don’t think as much as 13 cents. I bought a product “Kill-a-watt” last month to measure my appliance consumption of electricity, was extremely surprised to find my basement freezer burns $5 of electricity - a year!.
Most of my electricity is consumed in the summer for A/C and basement dehumidication.
We pay about 7 cents out here.
My elec bill runs $28/month (sorry, don’t know the rates). No TV, only thing I run is a frige, blower on the gas heater, dryer, and hot water heater, not many lights on, just the room I’m in.
If you don’t know the rates you pay for electric, there’s no point in comparison, price / kwh varies a great deal. See this web site for a rough state-by-state comparison as of June 2007
Should be KWH (kilowatt-hour, a measure of electrical energy) instead of KW (kilowatt, a measure of electrical power).
Also, comparison of electric bills has to be stated in $/kilowatt-hour along with kilowatt-hours used. Very easy to figure this from most electric bills: $(bill) = kilowatt-hours used X $/kilowatt hour.
Ever notice that the the cheaper houses always have the most Christmas lights, and they wonder why their bills are so high.
You’ve described my neighbors to a tee. As for Yours Truly, nary an Xmas light on the property.
I always breathe a sigh of relief when December 26th rolls around, and I don’t have to endure the tomfoolery anymore, that is xmas.
You’ve described my in laws as well. Family with three kids, stay at home mom, and a wage slave for a dad who makes 40K on a good year. They never turn on their thermostat over the winter to save money, never take their kids to the dentist, yet every Xmas their entire front of their house and yard is covered with Xmas lights and decorations of Griswold type proportions. So thier house looks great for Xmas, but their kids are forced to freeze and eat top ramen for Xmas dinner. It totally disgusts me. What was the old saying to describe this situation? “Penny-wise, but pound foolish?”
Yes, utitities were MUCH MORE expensive in the Northeast.
Yeah, you couldn’t get a power station of any form constructed around here.
All the anti-nukers and McMansioned NIMBY’s think that electricity, gaz, and home fuel oil are all delivered by the Energy Fairy.
hd, I usually agree with your posts, but maybe you should take a trip out to some of the Western states and visit a few tailings piles, blowing in the wind, one of which (Moab, UT) is polluting the Colorado River drinking water for part of S. California. We need to be able to deal with the waste more effectively before we go to nukes. Plus, they take a lot of water.
cough.. grow room… cough
LOL
It takes as much effort to grow an ounce of Oregano, as it does the “kind”, but one is worth Cents per ounce, and the other one is worth $400 an ounce…
Some Ores are worth considerably more than others.
you would be surprised- years ago i lived in anice apt in bayside queens ny which was pretty cheap rent
well when winter came and i had to use the electric powered heat i was getting con ed bills for 150++ for a 1 bedroom apt and this was in the mid 90’s
those large homes can get bills north of 1k a month
x-mas lights. Happy holidays!
I thought that was very high, too, almost double what I pay for the same size house in Maine. But then again, I don’t have three children, who probably use a lot of juice on computers, games, TVs, etc.
“How the heck does anyone have a $200 electricity bill in December? Depending on your part of the country, that’s more like an August bill. Either something aint right with that house, or CL&P is charging ridiculous rates for electricity.
”
It’s not hard to have a $200 electric bill if your home is infested by house guests over the holidays who haven’t mastered the advanced skill known as ‘turning off the damn light when you leave a room’.
“It’s rare to find someone with a subprime loan who understood what they signed, she said. ‘I have professionals who have gotten themselves into these mortgages who are clearly very bright people, and they just have no concept of what they’re really gotten themselves into.’”
I find it somewhat laughable at what passes for being “a professional” these days. If you have an on-line degree and dress up for work every day, you can call yourself a professional. Hell, you don’t even have to dress up anymore. But, that doesn’t mean you are financially astute.
“It’s rare to find someone what a subprime loan who understood what they signed …”
They didn’t care what they signed, all they cared about was getting the house.
The eternally rising price of the house would more than make up for any petty mortgage irritations.
Don’t worry, be happy.
Professional people are not necessarily astute. I know a few doctors who are way in over their heads and I’d consider them professional people.
In 1980 a very bright physician I knew declined to apply for the VA loan he was eligible for to buy a home because he mis-understood the literature the VA gave him on the loan process. This was at a time when interest rates on mortgages were 11.5%. He paid a lot for that mistake, in 1980 terms, which would be nothing nowadays.
What they didn’t understand was that prices go down.
I usually wear a pair of Levis and a sweater to my “professional” job.
‘I have professionals who have gotten themselves into these mortgages who are clearly very bright people, and they just have no concept of what they’re really gotten themselves into.’
Ok, something is just wrong about this statement… Either these people are not “very bright” or they are bright and have a “concept” of what they got themselves into but are lying about it.
How can you NOT have at the very least a CONCEPT of what an ARM is.
“How can you NOT have at the very least a CONCEPT of what an ARM is.”
They did. The woman on 60 minutes who said she’s not paying because her house isn’t appreciating speaks for the buyers of ARMs everywhere. There were all financially sophisticated buyers when the market was hot…you must have overheard a million of these RE conversations…all about how much their phantom equity had gone up just last month. As a renter, how many times did I have some mortgage owner lecture me about what I was missing and saying flat out that I was so far behind the financial game that I would never catch up.
My memory may not be as good as Ben’s, but on this point I am very sure. They all knew what they were up to…it just didn’t work out the way they all planned.
I don’t want to be too rude, but they all sound like bleating Germans in 1946…”hey, i never knew, didn’t have a clue, nobody told me anything, I never guessed, who’d a thunk it.”
Professionals and burger-flippers alike, they all knew.
“
“‘Some of my friends who live in smaller houses down the hill think we’re rich,’ Unander’s son, Chris said. ‘But I tell them, no, I’ve got to wear my hoodie inside all the time. I’m very aware that my parents are always trying to save money.’”
I remember wondering the same thing. Whenever I would go by a neighbor’s expensive house with two or more new SUV’s and Hummers parked in the driveway, I would always ask myself how in the hell do they pay for them and manage to feed and cloth their families. There would be no way I could do it on essentially the same salary. Now I know the smoke-and-mirrors trick; they had HELOCed themselves to the hilt to keep up the appearance of an affluent lifestyle!
Recently, a friend of mine asked me if I had a clothing rack that I don’t need because she wants to try drying her clothing on a hanger rather than in the dryer. Their bills seem to be piling up and she’s looking for ways to lower cost, like hand washing the dishes, keeping the heat low, not use the dryer, wear jeans two times before washing them…
They are trying to sell their spare minivan…wanted me to take a look at it. I said I was happy with my 13 year old car with 200k miles on it. Besides, if I had all that extra room in the car for other kids people would expect me to bus THEIR kids around to school and sports. As is I don’t like using my car when we can walk, why would I waste my gas budget on other peoples kids.
Wear jeans twice? That’s it? Unless you’re working with your hands all day, wear them three or four times.
Little boys, they get dirty.
I usually wear all my “visible” clothes (not underwear) two or three times before washing them, unless there’s a stain I can’t scrub out with water. This includes dress shirts for work, which I usually wear twice. Saves a lot of money and just as importantly, time.
My clothes washing & drying needs are rather small nowadays. My dryer died a couple of years ago. I noticed during the winter, the humidity in my home is so low clothes dry very quickly, even on lines hung in the basement (which needs dehumidification in the summer). During the summer I hang my laundry on lines in the backyard (no HOA to kowtow to). I do miss the fluffing effect.
I don’t know if handwashing dishes saves energy on less than full dishwasher loads. Takes a lot of energy to get the rinse water hot enough to do its job, and dishwashers get that water really hot and spray it really hard, so they would tend to use less water per dish that most people can do by hand.
I also hang my clothes outside on the line in the summer (love the way they smell) but in the winter, I use the dryer. No dishwasher, though. Does anyone have one of those hot-water-on-demand tanks? We’re thinking of putting one in.
We have a demand meter that was wired to heaters, dryer, etc. We set the load limit and if it exceeds it, it starts shutting down heaters, the dryer heat, etc. Bedrooms go first, because during the day they’re not used and that’s when the energy demand is higher. I’m sure that’s why our energy bills are lower.
Just be careful that your Home Owner’s Association and CC&R’s don’t prohibit “ugly” clotheslines!
(One more reason I’m glad I’m HOA free)
Bocoastal:
I rented a place a year or two ago that had had an on demand water heater (no tank) - it seemed to work pretty good, but it was obviously cold at first and you had to make sure the water was on full blast, if not, it was cold.
bicoastal: We bought one while living in mountains above Palm Springs and we saved about $300 on propane the 1st year. Plus, it’s endless hot water - never runs out if you get a big enough one. I could run washer, dishwasher and shower at same time. If I had it to do over again, I would buy smaller units for each water type room - kitchen, baths.
Thanks, that’s exactly what we need. Most of the time it’s just us, but in the summer we have a lot of houseguests.
Heck, I wear MY hoodie inside the house, and my utility bills show it. (As in, they’re quite low.)
if an extra few dollars on a utility bill is going to make you freak out, well you should not be a home owner-debt-slave
life on a shoestring is no way to go thru life
Personally, I think shoestringing it is kind of fun. It forces me to think my way out of problems, rather than spend my way out.
Amen
sorry i grew up in a single parent home and had to work since i was 9
so the little extra’s my family wants we get and we make sure a surprise bill will not blow our budget
i had to worry about bills from a very young age and i refuse to live on a shoe string budget
unless i cause the tight budget myself by saving so much our income which is entirely by choice and happens every month
True, true, but we lose a lot of energy to “leeches” which could be avoided. Leeches are things like the DVD player and electronics, some PCs, and other devices which have “instant on” functions. They maintain a continuous low-level flow just waiting for that command from the remote control.
Personally, when I can build my dream house, I intend to wire all of the lighting for 12v direct led so that it can be easily powered by solar and will last forever. While nickle-and-diming to squeak by is no way to live, indebting yourself to the power grid forever isn’t a real good option either.
I have the worst time sleeping unless it is very cold air. I bundle up under some blankets and I’m comfortable.
What the hell am I doing in LA then?
I can’t sleep unless I have my down bag suggled around me and a couple of dogs on each side. Now THAT’S cozy! Pretty safe, too - LOL.
I still remember when my mother explained to me what was really meant by the phrase “Three Dog Night” (when it was so cold, you needed three dogs on the bed). The dogs really do make a difference…
I watched the late 1980’s housing bubble in the city of angles, go bust in the early 1990’s, and this bubble is 100x as big, and nationwide, not just in a few selected areas.
BINGO aladdin. This one is far bigger in orders of magnitude and it is national (global?) unlike the out of synch busts of the 80s-90’s. It is because of the current geographic synchronicity that I believe we’ve seen nothing yet. It’s waaaaay early.
First they bottom lined their Companies. Then bottom lined their employees. Now they bottom line Consumer and Joe6p..Oh My !!!!
1980’s housing bubble gave me insomnia. Now I have HBB
!990’s dot com bubble gave me suicidal thoughts. I did’nt have HBB.
I told my friends that if I ever said I’m going to San Francisco, call my mom.
Now that I’m priced out I can read about it but I do not need to consult a lawyer.
Yet.
Stupid Athols…
“Homebuyers lured by cheap prices took Route 2 into Fitchburg and Leominster at the height of the housing bubble a few years ago. Longtime residents displaced by those newcomers followed Route 2 west to buy homes in rural towns like Athol and Orange.”
“Now the towns along Route 2 and west of Interstate 495 are among those with the highest rates of foreclosures in Massachusetts, according to the Warren Group.”
“Stupid Athols…”
LOL , well somebody had to say it. What do you think people from that town refer to themselves as?
‘Citywide, countywide, statewide — condominium sales and prices are down,’
NATIONWIDE?
Ya just can’t make this stuff up!
Leigh
‘It’s very reminiscent of the late ’80s, early ’90s, when the mortgage market was crashing. It’s not deadbeats. It’s happening to people who never thought they would be here.’
They won’t be there for long. The ‘live free or die” state likes to attract the rich and get rid of people in trouble. We had a spike of broke and sick people from there going on welfare and Medicaid in NYC in the early 1990s. I assume when the finished receiving our help, they went back because of our high taxes.
it’s all contained on planet earth
i heard it on 60 mins last night
from the look of things i may be renting well into the next decade
hopefully helicopter ben does not make my $$ useless
They live in a 2464 sq. ft. home (ah, the power of the internets). Does that quailify as a McMansion?
ot-sorry article from ny mag on slowing foreign investment in nyc
http://nymag.com/realestate/realestatecolumn/43261/
Excellent. The Trump wanna-bes on Curbed will have to come up with another reason why “it’s different here.”
http://curbed.com/archives/2008/01/28/armageddon.php#reader_comments
For some reason, they aren’t coming up. Let me know if the denial is still thick.
New Home Sales plunge by the largest amount in decades. Stocks rally on the hopes of another rate cut.
Well its good to see that the northeast is finally wrapping their collective empty skull around the historical fact of the late 1980’s and early 1990’s housing bust. The denial of J6Pak since the peak in 2005 would make many of you speechless. I’ve heard some of the dumbest $hit from people who ordinarily are fairly objective and intelligent. I think Ben’s book ought to have a very long chapter regarding the denial topic. I’ve had people go off on me after putting historical fact in front of them. They literally come unwound and it comes down to the basic fact that the truth (my words) get inbetween them and their wallets.
It’s a dangerous place to be at times.
Ive had that talk online and most won’t listen to reason. They think im making a mistake spending even $50k on a home in NW Pennsylvania but their $400k home elsewhere is “a good deal” They say my $50k home will depreciate. I have news, so will their $400k home and they will lose over $200k, I bet they will walk away long before while im still in my $35k home smiling.
exeter, i (have come to) expect this from people who own homes, but i get the same nonsense from people without a vested interest (renters)
If you read any local Boston real estate blogs you’d believe that our area isn’t being touched by any of this. Someone on Bostonreb.com suggested that the city center is undervalued and not experiencing a bubble. I’m sick of hearing that “Boston property values never decrease”.
“In 2002, Christine Mackie bought a 150-year-old, two-story Cape with an attached barn for horses in Townsend on the New Hampshire border. Her mortgage was $178,000, but as the years passed, the house skyrocketed in value and she refinanced twice, to $268,000, to generate extra cash from her equity.”
“When Mackie split up with her boyfriend in 2006, she realized she couldn’t handle her $1,750 monthly payments alone. Her mortgage holder, Ameriquest, agreed to not bring a foreclosure and ruin her credit, if she could sell the house. In late September, she found a buyer who offered $245,000.”
“Mackie spent around $40,000 renovating it with her partner. At first she listed it for sale for around $330,000. Eventually Mackie lowered her asking price, to compete on a glutted market. And when the time came to finalize the sale, the bank made sure she had been tough in negotiating the best possible price.”
So let me get this straight…she borrowed $90k and only put 40k into the house. What did she do with the other $50k. Always a hidden story behind these victims.
His truth - her truth - and the real truth.
Let’s not get sidetracked by all these “excuses” which are now being thrown around. Stuff like, “Even some professionals didn’t understand, etc.” B.S. 99.99% of this bubble is no different than any other bubble. The fuel is G-R-E-E-D. If the so called “professions” like realtors and mortgage brokers and appraisers are stuck with property which is now underwater, it isn’t because they didn’t understand - it’s because they thought if they bought 5 houses in 2004 for a total of $2 million, they would be worth $4 to $6 million in 2014. They had saliva generating dreams of standing around at parties in 10 years, telling everyone how smart they had been and smirking at those who said, “I wish I had bought back in 2004.” Yes, there are some who were scammed and didn’t know what they were doing but in reality that group is pretty thin on the ground.
The latest b.s comes from the Urban League (spokesman on tv a few minutes ago) are now saying that minorities were targeted and the practise was the opposite of “red lining”. In other words, they were bitchin’ and moanin’ when they said the minorities were being denied good credit and cheap mortgages BEFORE the bubble (red lining being the term used which separates minorities from getting the same benefits as whites) and now they are bitchin’ and moanin’ that they were subjected to the opposite of red lining. In case you haven’t noticed, that means they are born losers. Give them less opportunity to get credit discriminates - and giving them the same opportunity (people of all colors got shafted in this bubble) discriminates. How long before Obama and Jesse Jackson and Al Sharpton start asking for “reparation” for those who were discriminated against because of their color?
O.T. The stock market. What you are seeing at the moment is pure manipulation as Wall Street steals big chunks of money. Oushing it up fast - then going down fast as they replenish their depleted coffers. I love it because it suits the way I (a wanna-be day trader according to some) trade BUT it isn’t good for the 401k’s or Mom and Pops retirement accounts.
Wall Street loves good news and then bad news. It means more volatility and higher trading volume which leads to more revenue from the commissions of trading. It might be $7 a trade or whatever you pay but you multiply that by 5 million trades and you just made $35 million dollars! Even if they are dwindling dollars. It would not shock me one bit to know Goldman Sachs holds much of their money overseas on other currencies. The hedged the mortgage market.
One of Wall Street’s best weapons is to actually generate lots of good news and bad news via their shills and their analysts. The $7 ($10 in my case) trading fee is just icing on the cake. Of course it also sucks in a lot of people who think they can outwit by trading the biggest bunch of crooks (protected by the SEC) ever to walk the earth. Most soon learn their lesson. The big money comes from skimming from the 401k’s, etc. They are only using the same tactics (tried and true) the mobs used in Las Vegas.
Have no fear. Within a year, they will have replenished their coffers one way or another by skimming, stealing, getting tax payer money, bail outs, etc. Not to worry, as an old trader friend of mine once said, “Don’t try and equal them. Just follow in the dragon’s footsteps and pick up the crumbs they drop as they gobble down the cake.”
I agree with you. I don’t believe for one minute that all these people didn’t understand what they were getting into! They were greedy and were willing to take a chance with someone else’s money.
Many poor people are poor because they have a “money problem” that’s equivalent to how a drunk has an “alcohol problem”. You don’t solve an alcoholic’s problems by giving him booze; you don’t solve a person-who-can’t-manage-money’s problems by giving him money or credit.
I’ve seen my drunken Mother In Law declare bankruptcy three times. I’ve seen her buy crap from infomercials over and over again (get-rich-quick schemes and collectibles). I’ve seen her lose within weeks every pile of money she ever came into (several hundred K from one divorce was gone in two years. More recently a small inheritance of 30K was gone in about 6 months after she met someone who told her of a great penny-stock investment)
In fact, they should give FB’s who have any anomaly on their mortgage application a choice: Either pay fines and face criminal charges OR be declared mentally incompetent and be barred from entering into a contractual arrangement for the rest of their lives. You can’t have it both ways.
For those who missed 60 minutes last night and want to see their take on subprime.
http://60minutes.yahoo.com/segment/134/subprime_meltdown
“For those who missed 60 minutes last night”
There sia poll on the website…current results:
=====
Who is to blame for the subprime meltdown?
* The mortgage lenders: 19%
* The Wall Street security brokers: 5%
* The borrowers: 10%
* All of the above: 65%
Yeah for “all of the above”!
“‘We’ve had to respond to the market. We had to. We’re doing what the market is telling us,’ said Ellen S. Goldberg, a spokesman for Cathartes Private Investments, which co-developed the SoCo146 property.”
I could of sworn that Ellen is a spokeswoman’s name.
“both had ’surprise’ third children after they thought their families were complete, both needed larger houses”
OK, I realize that people need space. Heck, I actually like bigger houses, I *love* the extra space and the sense of openness. And I realize that, as an average American, if you have another kid, you want a bigger house.
However, lets at least be honest here. These people didn’t NEED a bigger house, the WANTED a bigger house. I’m sick of stories portraying these buying decisions as necessities, as opposed to CHOICES.
Yes, my family is a family of mutants…we currently rent although our income is way above the median, and my three children share a bedroom , because they want it that way (they are “little kids” and “pre-teens”), at least for now. There are five of us, and we live in a three bedroom house.
My point is, getting a bigger house is a choice…maybe it’s because your kids would kill each other if they had to share rooms, maybe you have guests that visit frequently and you need a “guest room”, maybe you want to impress your family and freinds by how you’ve moved up in the world.
But, it *is* a choice…not a need.
Maybe we need to change our attitudes, so that we realize that some of our material “needs” are the same as the “needs” of our kids when they see a new toy on TV, or when they see a giant “jaw breaker” at the candy shop…”need” is different than “want”.
good for you
i shared a room with my sister until i was 18 and now i have three bedrooms for just myself, my wife and our beloved dog who shares our room with us
i have an office and a spare bedroom for the in laws too
every kid is entitled to their own room?
remember when most homes had only 1 bathroom?
i have 2 bathrooms too
“But there’s plenty of good news in this market for first-time buyers or anyone who doesn’t have to worry about losing money on a sale. There are plenty of houses to choose from in the Nashua market, and they’re often selling below asking price”
Sorry, Dave, but “selling below asking price” ≠ “can’t lose money”. ‘Round here, we call such early buyers “falling knife catchers”.
A Crash Course for Central Bankers
By Ben S. Bernanke
http://www.foreignpolicy.com/story/cms.php?story_id=3272
The downturn following the collapse of Japan’s so-called bubble economy of the 1980s was not as severe as the Great Depression. However, in some crucial aspects, Japan in the 1990s was a slow-motion replay of the U.S. experience 60 years earlier. After effectively precipitating the crash in stock and real estate prices through sharp increases in interest rates (in much the same way that the Fed triggered the crash of 1929), the Bank of Japan seemed in no hurry to ease monetary policy and did not cut rates significantly until 1994. As a result, prices in Japan have fallen about 1 percent annually since 1992. And much like U.S. officials during the 1930s, Japanese policymakers were unconscionably slow in tackling the severe banking crisis that impaired the economy’s ability to function normally.
I have a friend that had retail businesses in Guam, Saipan and Tinian in the South Pacific, in the 1980’s and 1990’s, and his business was going gangbusters, selling to Japanese tourists, until they suddenly stopped coming and spending money.
Game over.
yes…it will take awhile to digest all the debt that’s in the system. Now that the credit bubble is unwinding, I think commercial real estate will be the next to go.
From Brokeroutpost.
http://forum.brokeroutpost.com/loans/forum/2/198524.htm
sheriephillips 198 Posts
“Although the thought that your home will consistantly appreciate and never go down in value is not logical and most people understand that concept in investing, the reason behind the drop in home values this time around is different. In the past when values started to go down, people had some equity in the property since they had to come up with a down payment to buy the house and they didn’t want to walk away from their initial investment so easily. The home probably had emotional value to them, so people stuck it out if they could and waited for the home to appreciate in value again. But this time around, you have overinflated values in properties attributed to the 100% stated, subprime loan product, which in fact, is excactly what caused the values of home to overinflate in the first place. Out here in California, where values skyrocked to heights the rest of the county could never concieve, even small drops in values can amount to hundreds of thousands of dollars lost. What has happening in the marketplace was a frenzy, all generated by subprime lenders with no care whatsoever of the product they were selling. As we see, it didn’t just affect the subprime borrower only, it affected all borrowers and owners of real estate. I did things right, I bought at a reasonable time (2003), put in 10% down payment, took out a regular full doc loan and take good care of my home. In 2005 (at the height of values), I got divorced and had to refinance my home at it’s 2005 value to pay my ex husband 1/2 of the equity. So now I owe more on the home then I did to begin with, but only due to a divorce. My ex got the equity based on the highest value my home achieved and now I, too, am upside down on my home. Add to that, I lost my job in September 2007. Now with values dropping and out of my control, I have a home with no equity in it, a large mortgage payment and no job. I will do my best to keep my home, but I can’t say the thought of turning it over to the bank hasn’t crossed my mind when I realize it can take me up to 10yrs to gain that value back, while making the payments at double what I can rent the same house for next door.”
Basically she is in trouble. How many divorced women fight for the house and now are stuck with the house? Women are naturally into “nesting”. There are also more single women than men who have bought homes in the last few years… nearly double the rate.
“My ex got the equity based on the highest value my home achieved and now I, too, am upside down on my home.”
This is a touchy subject, but in retrospect, should you have just sold the house, leaving you both with a profit, and gone your separate ways? He got lucky by accident, but why did you hold on to a house at it’s new, harder payment burden when you are newly single? I’m not trying to rub salt in wounds, I’m genuinely curious.
http://www.forbes.com/leadership/2008/01/23/davos-economy-finance-lead-cx_cl_0123soros.html?feed=rss_popstories
Live free or declare BK…
“Nearly 3,000 Granite Staters filed for bankruptcy last year. And the number of individuals trying to repay their debts through bankruptcy — known as Chapter 13 filings — is at the highest level since the modern Bankruptcy Code was enacted in 1978.”
All because the Old Man of the Mountain fell off his cliff.
Rachel Huzior is a liar. she made up this sad story so she could have her picture in the paper. The paper should do a follow-up story on her to see she has a pool, hot tub, new cars, quad & finished basement. Plus she has time to haunt the neighbors with her dog barking sounds she makes. Two years ago she got arrested for choking her mother at the store.