One Of The Greatest Threats To The U.S. Economy
A weekend topic on two parts of a series from the Post Independent in Colorado. “For a look at one of the greatest threats to our region’s economy — and perhaps to the U.S. economy — meet Krystal Wu and her fiancé, Matt Miller. Both with master’s degrees, in 2013 they accepted teaching positions at Roaring Fork High School in Carbondale. Each took a $10,000 pay cut from teaching jobs in Oakland, California, which they left because of the high cost of living. ‘We figured that the cost of living here would be proportionate to that pay cut,’ Wu said.”
“But prices driven up by the area’s overall desirability and proximity to Aspen proved to be a strain for the young teachers, as they are for any middle-income worker. ‘We love it here. I love my job and I love my students,’ Wu said, but added: ‘We didn’t know what we were getting into. We moved here from the Bay Area because that was exorbitantly expensive. But we found that we were paying a similar price for our apartment here as we were in Oakland — $1,500 for a two bedroom. But we were making $20,000 a year more in Oakland.’”
“Although together they earned $80,000 a year, Wu, 27, and Miller, 37, also are paying off $48,000 in graduate school loans. So the couple this summer quit the valley. The University of Idaho beckoned, where Miller is now teaching — and housing is half as expensive. ‘If we stayed here, we would have to ask our parents for help,’ said Wu. ‘There’s no way we could afford to buy a house with the money that we have, and we want to start a family soon.’”
“The Roaring Fork Valley attracts big money along with promises of life in paradise. Despite the glamour of Aspen and a thriving recreation economy, Garfield and Pitkin counties remain essentially rural places with resort prices. Across the country, the middle class is losing ground. But what is happening in the Roaring Fork and Colorado river valleys makes it difficult to attract and retain the people essential to nurturing and protecting communities, such as police officers, nurses and teachers.”
“Teacher and police pay in the region are comparable to that in cities of various sizes around the country, Post Independent research found. Out of the department’s staff of 31, only eight or nine live in Glenwood. Glenwood Police Chief Terry Wilson consistently faces unaffordable housing headaches when he recruits. To move the hiring process along, Wilson acts a bit as a real estate agent himself. ‘We show potential recruits ads in the newspaper, put them in touch with local real estate companies. They need to get the sticker shock out of their systems. They need to do a realistic and comprehensive look at what it’s going cost them to provide housing for themselves and their family. I’ve seen a lot a lot of jaws drop when they do that.’”
“Eighteen months ago, Amy Wright, her husband and their 5-year-old son relocated to the valley because Jason had been offered a job at an Aspen architectural firm. But the small family quickly found out that they could not financially swing it on one salary. ‘When we moved here and things were not shaping up financially, my husband said that I really needed to get a part-time job,’ Wright said.”
“Wright, 44, who holds two master’s degrees and had taught in the Massachusetts public schools for more than six years, took a part-time job as a barista at Starbucks. ‘If we decide to stay in the valley, I’m going to have to take two part-time jobs. I’m kind of dreading that,’ she said.”
“Every day, Wright feels the weight of her troubled finances. ‘My student loans are in the 30s. And since moving to the valley, my credit card debt is in the 30s too. Our rental apartment is just under $2,000, but we have a mortgage that we’re paying for our house in Albuquerque. We rent that out, but we’re upside down $400 a month there. We have to make at least a $100,000. I need to make over $30,000.’”
“The Wright family does not have the time or the money to enjoy all the pleasures of their rich surroundings. And forget about the toys — the skis, the snowboards, the bikes. ‘It’s beautiful,’ Wright said, ‘But it’s a resort. We live in a resort. How do you afford all this?’”
Typical Californicans. Dumb with money(perhaps the reason they have none), deep in debt and clueless.
California:
8th largest economy in the world produced by 0.5% of the worlds population. Don’t cry for us, Mafia!
California: Most Impoverished State In The US
http://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty_rate
(geography adjusted)
DC actually tops the list but that particular nest of corruption isn’t a state…. thank God.
“Every day, Wright feels the weight of her troubled finances. ‘My student loans are in the 30s. And since moving to the valley, my credit card debt is in the 30s too. Our rental apartment is just under $2,000, but we have a mortgage that we’re paying for our house in Albuquerque. We rent that out, but we’re upside down $400 a month there. We have to make at least a $100,000. I need to make over $30,000.’”
Did AlbqDan and his family move to CO!?
Hilarious. I thought maybe he was Shanghai’d back to China, but now we know he is part of the Aspen poverty population…..
Keep peeling-off the economic band-aid(s), and government housing subsidies are likely the root of the problem, e.g., particularly the mortgage liquidity industry. Fannie and Freddie need to be dismantled to protect the middle-class from going extinct. Remove the government guarantees and Wall street will go away.
Why would Democratic politicians who profit mightily from such “government sponsored enterprises” ever vote to dimantle them?
Only the pure Republicans, sent directly from heaven by God, can save us.
Only the pure Catholic Republicans can get the job done…..oh wait, they seem to resign when the going gets tough.
“Keep peeling-off the economic band-aid(s), and government housing subsidies are likely the root of the problem, e.g., particularly the mortgage liquidity industry.”
But, but, but … these bands aids and subsidies are what is keeping prices up, which means they are what is keeping equity intact.
“Fannie and Freddie need to be dismantled to protect the middle-class from going extinct.”
But, but, but …housing prices is one of the few things left that is keeping the middle class from going broke because housing prices is one of the few things that is keeping their wealth intact so if you yank away Fannie and Freddie then the ugly head of reality will then arise and finish off what little is left of what the middle class has (or what it thinks it has).
If Mommy and Daddy are going to have to forever support their children - grown or not - then they are going to have to have some of this wealth stuff to do so, and this wealth stuff used to be called such things such as a good-paying job, a 401k, or home equity.
Good-paying jobs seem to have vanished, 401ks (their values, at least) seem to be vanishing, so all that is left is home equity - which means that if home equity vanishes then Mommy and Daddy are financially screwed right along with their children.
They can always sell the children for medical experiments, rid themselves of an expense and net a tidy sum.
“Wright, 44, who holds two master’s degrees…” —snip— “My student loans are in the 30s. And since moving to the valley, my credit card debt is in the 30s too. Our rental apartment is just under $2,000, but we have a mortgage that we’re paying for our house in Albuquerque. We rent that out, but we’re upside down $400 a month there.”
Who loaned too much money to this over-educated borrower?
Well, let’s see:
- student loans on an overpriced education: government-loaned.
- mortgage on an overpriced house: government-loaned.
- CC debt: private.
If we could only get the government into the business of making CC loans or guarantees, then it would have been a clean sweep!
Yeah, I thought the same thing. You’ve got 2 masters degrees, but you’re a barista at corporate coffee?
James “Amazing” Randi tells us that it’s fairly easy to fool these sorts of people. People with degrees who are told constantly they are smart, have enormous vanity as a result, and you can manipulate that easily if you know how. In Randi’s particular skill set, he plays that class of person by exploiting the weakness of believing in (manipulated) evidence. And frankly, he finds it easy to manipulate such people since they tend to be stunningly naive about how real Humans operate (i.e. they lie, cheat, steal).
Even when I was 21 years old, I can’t imagine thinking that I should move cross-country without understanding the costs of living in the area I’d arrive in. And that was pre-Internet. What possible excuse does this Google-drenched couple have? None.
Granted, life doesn’t come with a manual, but these people are crappy at due diligence and designing their lives. It seems they weren’t looking at the macro picture. All the couples represented, are well educated, and had numerous options. They neglected data points, imho. Wu and Miller redesigned their lives to work, and I give them kudos.
“Granted, life doesn’t come with a manual, but these people are crappy at due diligence and designing their lives. It seems they weren’t looking at the macro picture.”
(click)
“All the couples represented, are well educated, and had numerous options. They neglected data points, imho.”
“Well educated”. “Numerous options”.
Bahahahahahahaha … my favorite people. Place a dotted line in front of them that insures for them enduring impoverishment (and for me, enduring income) and I’ll be damned if they won’t sign it.
The pukes who come to me who are not “well educated” and do not have “numerous options” in general do not present to me the prospect of milking from them thousands - tens of thousands - of dollars of future income the way these “well educated” with “numerous options” pukes do.
Bahahahaha .. educated fools is what they are; Educated and dumbed-down.
lying.through.her.teeth.the.whole.time.
and completely impervious to being called out on it.
And admits she’s a Realtor. No surprise at all.
I don’t think that they neglected to learn the “cost of living” data points. They could have gone somewhere cheap, like Topeka, KS or Tulsa, OK. But places like those are “yucky”. I’m sure that when they saw those Colorado mountain communities they became wide eyed and decided that costs be damned, they would live there, that they would find a way to make it work. Resort areas where zillionaires own mansions are always unaffordable. The could have gone further west down the valley towards Grand Junction, where it’s much cheaper. But GC isn’t in the valley, and it isn’t cool or hip.
But why lie?
““Wright, 44, who holds two master’s degrees..$30K school debt & $30K on CC”.
Wow, two worthless master degrees and doesn’t want to work. Can only get a job bar tending. Has house in NM upside down a $4800 per year. Some where our school system has really failed Wright or she’s lacking some intelligence genes.
That’s fairly typical for a Californican.
“Our rental apartment is just under $2,000, but we have a mortgage that we’re paying for our house in Albuquerque. We rent that out, but we’re upside down $400 a month there.’”
Bahahahahahaha … I wish they had bought several.
“The Wright family does not have the time or the money to enjoy all the pleasures of their rich surroundings. And forget about the toys — the skis, the snowboards, the bikes. ‘It’s beautiful,’ Wright said, …
(Caution: The punch line is about to appear …)
“… ‘But it’s a resort. We live in a resort. How do you afford all this?’”
OMG, I Iove this blog.
(Hey, the most amazing thing happened to me this morning: I woke up and realized that I live in an expensive resort.)
Not even bartending where one can actually make good money…. working at Starbucks! That’s what two masters degrees are good for!
Those of you in hi-tech, are H1-Bs in less demand?
I’m in biomed research, not tech, and I can tell you there’s an insatiable demand for Chinese postdocs who’ll work 3500 hours per year at $50K. Cheap labor, man. Yep, mostly H1-B.
““Although together they earned $80,000 a year, Wu, 27, and Miller, 37, also are paying off $48,000 in graduate school loans.”
The interesting thing here (unless things have changed over the year) in CA is that if you teach in an underprivileged school district your school loan debt can (certain percentage per year) be forgiven. I know of one person who’s total debt was erased within five years and his pay per year was higher because he taught in a ghetto area.
and his pay per year was higher because he taught in a ghetto area.
Hazard pay.
Quit bitching, you serfs, and get with the program.
Get a second job, go out in the boonies to find a house you can afford, and commute 60 miles each way like the rest of us bitchez.
Or move to Kansas……….I hear that they are paying teachers the ungodly amount of $25k a year.
We be cuttin’ some fat hogs.
drive until you qualify. That could be all the way to nebraska or the dakotas.
100 miles west on I-70 should do the trick.
“Drive until you qualify…”
Or don’t drive. Just rent cheap compared to PITI-M.
I recall the Wrights complaining that the rent was too high.
Falling housing prices my friend…. falling housing prices.
Seattle, WA Housing Prices Crater 5% YoY
http://www.zillow.com/fremont-seattle-wa/home-values/
Lying with statistics again, I see . . .
Fremont is one of the hipster hotbeds in Seattle. No falling prices here. We are cheep cheep cheep in comparison to Vancouver BC and SFO (which you would know if you have been reading this blog over the past week - it has been mentioned several times).
Prices are falling my friend. This is very positive economic news. Very positive
Fremont is one of the hipster hotbeds in Seattle. No falling prices here
Beyond that, a number of tech companies are expanding in the area, adding high-paying jobs. (Google, Tableau, etc…)
Irrespective of that, prices are falling in Fremont.
Irrespective of that, prices are falling in Fremont.
They will be (I hope)—but there is definitely no sign of it yet.
Did you even look at the graph that you linked to? Probably not—cause it was strongly up-and-to-the-right, modulo seasonal effects.
A 5% decline in prices YoY is clear.
Sorry.
Putzes shoulda worked smart, saved money, and lived sustainably. Lord I can’t wait until decent people who are responsible with their money get to profit from the carnage to come.
don’t hold your breath!
I’ve already profited. When housing cratered the first time, I bought in late 2008, using cash. I bought below twenty dollars a square foot. Frugality and prudence permitted that. Now I’m completing my 6th year of living under a roof without paying a landlord or banker. So that my area is fairly poor by average standards, hardly matters. If you can’t afford a hundred bucks a month in property tax, just kill yourself. I can barely remember what I was like to dig into my pockets to pay some landlord a large amount of money every month, or he’d throw my out from under the roof… probably because the memory was a bad one, and I’ve blocked it.
Owning my own home outright is totally wonderful. And a lot more Americans could do it if they’d just stop moving away from Blacks, and return to the vast neighborhoods across American which sit partly empty.
It’s generally a positive outcome only if you don’t overpay. You paid even less than what a used house is worth(new construction cost of $50/sq ft for lot, labor, materials and profit fully depreciated to used condition or about $35/sq ft).
Just go west and “drive until you qualify”. I’m sure you can find something cheaper in Rifle or Parachute. Of course those towns aren’t resorts like Glenwood, Vail or Aspen; so they aren’t as cool (your neighbors will be rednecks) and you’ll have a loooong commute to work (extra fun in the winter), especially if the job is in Aspen or Vail.
I’m going to Colorado Springs today to shoot video. Do people commute from there to Denver? Lots of new houses with price reductions from what I see online.
Yes there are plenty of commuters from the Springs. Until last year I worked at the Denver Fed Center in Lakewood and I knew quite a few people who drove up every day.
I have only driven through there on the interstate. Anything within commuting distance to denver seems high.
My buddy was n fort collins a few weeks ago.bubbly there too. They do have good beer somewhere there.
Im sure there will be a lot of stucco and tile roofs to see. Stop into one of the new home builders trailers and tell them u r looking for a deal.
Tile roofs are rare out here. Most houses here have finberglass/asphalt shingles.
Stucco is also less common out here, not sure why. Most new houses will have some form of siding, maybe a brick facade.
You should watch the video next week. 800k new houses (price reduced!) made out of particle board, covered with tar paper, wrapped in chicken wire and stucco slapped on it. And on a .27 acre lot. After what I saw today I think CS will turn out worse than Denver itself.
OMG—particle board? For real? Those things are going to disintegrate in NO time!
“…wrapped in chicken wire and stucco slapped on it.”
Shotcrete has a high thermal conductivity, which would seem a poor choice for the winters on the high Colorado plains.
True for any cementitious product but it’s shot on polystyrene and wire backup.
It looks like stucco. Anyway, for 800k I would expect more than what I saw. Like those foam details on the Chinese houses that were easily broken up, if this is where we are going; polystyrene sprayed onto particle board, the costs should be much lower than actual brick or hardwood construction. They are throwing up thousands off housing units in Denver and Colorado Springs, all jammed into three story or higher condos/apartments or houses where you could hand your neighbor a cup of sugar out the window. I have some video showing $400,000 houses being built right next to a landfill, which towers over the landscape. It was near Broomfield or Anthem, I’ll have to review it tomorrow.
It is sad that teachers are paid so little in this country.
So sick and tired of the teachers aren’t paid well meme. The jokers in the aforementioned example pull down 80 grand a year and they only work for 9 months.
Asumming they each make 40k then the 12 month equivalent salary would be about 53k… plus they get ridiculous health care and pensions probably.
They’re just poor money managers and make bad decisions. Like I’d even want them teaching my kids with their track record.
tired of the teachers aren’t paid well meme…and they only work for 9 months..each make 40k ??
Hmm…Lets see…Firefighter (I use that term loosely because they really should be called first responders) son of a close friend been in the department now for 8 years…two years of Junior college education…36 years old…Makes $135,000. per year without overtime which he can garner as much as he wants…Works 12 days per month…I think he buckled down one year and worked like 20 days per month and made roughly $170,000…Plays with all his toys and kids on the other 18 days off…Wife doesn’t work…bought a house 5 years ago…8 years on the force and has not fought a fire yet…He is getting really good and the house calls and vehicle accidents though..
So, please, tell me again how teachers with masters degrees making 40k are not underpaid ??
No wonder California is losing population.
Why are firemen paid 3x their actual worth?
Why are firemen paid 3x their actual worth?
Unions.
So, please, tell me again how teachers with masters degrees making 40k are not underpaid ??
Most people I know agree on two things with respect to teachers:
1. Good teachers should be paid more (which will attract more people to the profession).
2. Bad teachers should be fired.
Why can’t either of these things be done? In CA, the answer is that the Teachers’ Union gets in the way.
Does a master’s degree really add value? My take is that teachers go after these things for raises per the steps-an-ladders scheme. Any kind of stupid Ed masters will do. That and military promotions are the University of Phoenix is for.
They add nothing. Ed degrees are an absolute joke. Zero rigor. Many teachers pay to play through crap places like University of Phoenix. I’ll make an exception for those teachers who get a Masters in their subject area (Math, English, History, etc.), but the rest aren’t worth the paper they’re printed on. They do increase your salary though.
“They’re just poor money managers and make bad decisions.”
I know more than few teachers, and they all drive vehicles with payments, some rather luxurious; no fixers.
plus they get ridiculous health care and pensions probably.
In the centennial state many school districts do not offer pensions to new hires and healthcare bennies can be so-so, unless the school district has been “de-Bruced” (exempted from TABOR) by local voters (like say in Highlands Ranch). Being that this school district is on the western slope I seriously doubt it’s been de-Bruced.
My son is studying to be a teacher and has already said that he will look outside of Colorado for work because you can do better elsewhere.
do the pension meth and days worked per yr
suddenly teacher pay is ok
Teachers are heavily compensated. For that, they work 9.5 months of the year. For the rest of that 9.5 months, they enjoy 8-10 federal holidays, plus 2 to 2.5 weeks of “breaks” (Spring and Xmas). Then there are a few “teacher work days”. Then there are the 10 or more of paid sick days (generally can be sold back to the district). Then they have 10 or more paid vacation days.
I keep urging people to do the math on these “hard working” teachers. It’s obscene how much they get paid for how little they actually work.
52 wk in the year
minus 10-11 wk Summer Break
minus 2 wk federal holidays (most of which avoid Summer)
minus 2-2.5 wk Spring/Xmas breaks
minus 2 wk paid vacation
… and you get 35 total weeks, 67% (or 2/3) of the year. And that’s not counting sick days or seniority which confers more vacation and sick days.
Hence, whatever teachers are paid (not counting their typically generous benefits and retirements), simply increase that by at least one-third (often one-half) to account for all their paid time off.
Granted, parochial school teachers may have similar schedules but aren’t as well paid. Around here, a ParSch teacher starts at $18K a year, which is far under the PubSch district start of $32K. Our PubSch sports an average yearly salary of $48K, which is at least 50% more than the median household income for the metro area. Note that people earning that average probably get 4 weeks vacation and 3 weeks sick time… that’s 3 more weeks they aren’t working (vacation and sickness) or they’re getting paid double for (selling back benefit days to the district), hence they work 32 weeks, or 61%.
By the time you’re earning more than the median HOUSEHOLD income by yourself, you can’t ever claim hardship of any sort.
Wow, this thread is like a cornucopia of schadenfreude. The wife has to work—because they are underwater on a house that is rented out, but cash-flow negative. Amazing.
So… They thought moving to freaking Aspen was going to be a cheap alternative to the Bay Area? This really is the dumbest thing I’ve read in a long time.
+1. That seems like an IQ test—and they failed.
Like architects daydreaming, teachers are the positive-outcome believers, which creates a cognitive firewall that can block reality from getting through. Hence they blame “the rich” for their lack of housing choices while the reality is that social programs in the form of housing subsidies and inflated mortgage guarantees have driven housing costs beyond their reach. When they grow-up they will understand that everyone is a self-interested capitalist and that their Wall street infested government has become the enabler.
+1.
Once upon a time, Carbondale was were the hired help lived because it was affordable. That is no longer the case. Like I said above, they saw the place and became starry eyed. They were coming from Oakland, they must have thought that they died and gone to heaven.
Another thing they may have overlooked and might be the final nail in the coffin are the winters, which are harsher in the resort areas than on the Front Range. If they are thin blooded Californians that might finally convince them to try someplace else.
Message to RAL and his many alternate personalities…
From the “incalculable losses” department… I scooped up a 3 BR rowhouse the other week for $80-90k (not giving exact amount bc don’t need trolls searching last week’s transactions for my area). Brings in $2505/month in rent. Sellers needed to move ASAP bc the husband is losing his mind in old age and his daughter keeps bumming money off him. Wife wanted to dump ASAP, loved the cash transaction aspect. Sellers had a very bad mortgage from the mid-2000’s with payments of like $1700/month so they were not making a lot on the house.
Tenants in place, new lease signed. Very plain and basic, no frills. Nice yard, quiet block, good neighborhood overall. New (plain) bathrooms, biggest thing it needs is windows and paint. I’ll get it painted this fall/winter and maybe get quotes on windows next summer. Low price due to 1100 sq ft size — it is too small for what white families “expect”. Thus it gets rented to groups of roommates.
I will admit, the transfer taxes here in MD are high and the property taxes are nearly 2k/yr which does take a bite out of things.
OTOH, the depreciation I’ll be able to claim on yet another 60 yr old rowhome are tasty. Really shields the income.
I plan to keep buying in that area. Sturdy houses at cheap prices.
“Brings in $2505/month in rent.”
That’s pretty lofty; I wouldn’t count on that 12-mo/yr.
Slumlords rejoice!
Joe, are you familiar with Hagerstown at all? I have a contact there and I am considering seeking employment.
cold winters but see more at city-data.com
Liberace!
Well, on the face of it that sounds like a good deal. The math indicates something big is missing from the story. If one of the roomies bought the place, his mortgage would be less than what he is now paying in rent, and he could collect rent from the other two high class roomies or say goodbye to them.
The math indicates something big is missing from the story.
Well said.
“If one of the roomies bought the place, his mortgage would be less than what he is now paying in rent, and he could collect rent from the other two high class roomies or say goodbye to them.”
Yes. The question is really about vacancy rates in the area, and what rents are. If vacancy rates are low, and rental rates are high, then something isn’t right–prices are too low based on the rents that can be achieved.
Vacancy rates are near record highs once again Rental_Fraud.
Hooray! That’s kind of funny - joe gets a good deal and you call him a slumlord, someone else makes a bad or so-so deal and they are a debt donkey. Hmmm…
Even at 2 month’s/year vacancy it looks like joe’s got good cash flow.
/fail
Bellmore, Long Island, NY Housing Prices Crater 10% YoY
http://www.zillow.com/bellmore-ny/home-values/
Seattle, WA Housing Prices Dive 5% YoY
http://www.zillow.com/fremont-seattle-wa/home-values/
Redwood City, CA Housing Prices Sink 4% YoY
http://www.movoto.com/redwood-city-ca/market-trends/
Cupertino, CA Housing Inventory Balloons 142%; Prices Fall YoY
http://www.movoto.com/cupertino-ca/market-trends/