A Tour Of Too-Easy Money
The New York Times reports on Nevada. “Michael Hutchings bet it all when he built his 3,300-square-foot dream home on a strip of rock-strewn desert gazing west toward the Las Vegas Strip. He had made a fortune building custom homes as Las Vegas boomed higher and higher, and for his own, he chose red Spanish tiles, wrought iron and silky white plaster. A guesthouse? Sure. Swimming pool? Of course. That was 2006. You know what happened next. Today, more than eight years after the housing crash, Hutchings, 49, owes about $800,000 on a property that has not recovered its value from the bubble days. ”
“As neighbors lost their homes to foreclosure, he started to hear gunshots and see stray dogs roaming the streets here around Sunrise Mountain. A drug dealer moved in down the block. Over the protests of his wife, Terrisa, Hutchings now stashes an unloaded shotgun in the bedroom closet and a handgun in the kitchen cabinets. He could walk away from his mortgage and lose the $580,000 he has paid, or he can keep pouring his savings into the same hole. It is a mess with no good choices, he said, just like the presidential election. He will vote Republican, but Clinton or Trump — either way, it feels like a losing wager, he said.”
“‘The whole system’s kind of broke,’ he said. ‘We’re trying to reinvent ourselves, trying to run businesses, trying to pretend like it’s 2003 again. And it’s not.’”
“Las Vegas is a glittering promise built on a simple truth: The house always wins. But years after rotten loans and plunging home values made Las Vegas the center of the housing crisis, thousands of people have yet to recover from the cataclysm that tipped the U.S. economy into a recession.”
“Even with new resorts springing up on the Strip, home values recovering and record numbers of visitors pouring back to this American playground, thousands of people in golf-course mansions, gated condominiums and stucco starter homes are still stuck in 2008, battling with their banks, owing more than their homes are worth, trying to negotiate a sale to avoid foreclosure. To visit this underwater America is to take a tour of too-easy money, bad choices and worse luck, and of the way the economic toll of the Great Recession still haunts much of America.”
“Mark and Anna Lissor are hitting retirement age, but they owe about $500,000 on an overdue home-equity loan they used to remodel their house. They are hoping to negotiate a short sale for less than the value of their loan. It would spare them foreclosure, at least. ‘I was so stupid,’ Anna Lissor said. ‘How could I be so naive? I just didn’t realize what was going to happen. Our balance was going up every month, every month. And then everything plummeted. And we were in the hole.’”
“The Lissors are Republicans. Still, Anna Lissor gives President Barack Obama credit for creating programs that sought to keep people in their homes. But she said the bailouts had ended up favoring banks over typical homeowners. She sees Clinton as a liar and a cog in a rigged system. Mark Lissor walked into his study and pulled up the real estate listings for the neighborhood. A galaxy of blue dots filled the computer screen, each representing a house at some stage of the foreclosure process.”
“‘There’s one down the street,’ he said. He clicked over to his home, a red dot up for sale to satisfy the bank. ‘I don’t care what they sell it for. I’m getting nothing out of it.’”
“Head to the northern fringe of town, where waves of new homes run abruptly into an eternity of desert. The Jansons live here, in a peach-colored house they bought for about $290,000 at the height of the bubble. They are all Democrats, and staunch Clinton supporters. They worry that a Trump presidency would be a pipeline to the rich and stifle government programs to help workers or the poor. ‘If Trump gets in there, we’re in deep trouble,’ said Josephine Janson, 55.”
“Last Christmas, her husband, Kevin Janson, 56, lost his $20-an-hour job as a security guard at MGM Grand and took a replacement gig at a downtown casino for $12 an hour. Josephine Janson was getting fewer and fewer hours at the jewelry counter at Kohl’s. Then, in June, she was hospitalized with a severe potassium deficiency, and said she had lost her job the day she returned to work.”
“The family started to strain to make $2,000 monthly payments on a loan that, even at the best of times, ‘was a little bit beyond our means,’ Kevin Janson said. As the house’s value sank, they owed more than it might ever be worth. They spent $3,500 and countless hours to modify the loan and reduce the payments to a more manageable $1,500 a month. They have Kevin Janson’s paycheck and his pension as a retired member of the Air Force. ‘We can probably do it, but just barely,’ he said.”
“Many of their friends and neighbors sold at a loss or walked away from their homes, but the Jansons decided to stay. When he drives home from work every day at midnight, he skims past signs for sparkling new houses — Harmony Homes! The Preserve! — but the house is all the family has. ‘What we have is what we’re sitting in,’ he said.”
Hampden(Denver), CO Housing Prices Nosedive 10% YoY As Speculators Flood Market With Housing
http://www.zillow.com/hampden-denver-co/home-values/
ZILLOw predicts 5% increase ?
They forecast 10% increase last year. Instead prices fell….. 10%.
…they fell 100% for your 20 year old Chevy truck you keep advertising. not a buyer in sight.
im sorry u missed the housing bull run! LMFAO
Since President Barack Obama first took office:
Homicides have dropped 13 percent, but gun sales have surged.
The economy has added more than 9 million jobs, and the jobless rate has dropped to below the historical median.
The number of long-term unemployed Americans has dropped by 614,000 under Obama, but it is still 761,000 higher than at the start of the Great Recession.
Corporate profits are up 166 percent; real weekly wages are up 3.4 percent.
There are 15 million fewer people who lack health insurance.
Wind and solar power have nearly tripled, and now account for more than 5 percent of U.S. electricity.
The federal debt has more than doubled — rising 116 percent — and big annual deficits have continued.
A failed presidency.
Wind and solar are not, and never will be, baseload power sources. Without baseload powerplants, you have a third-world electrical system.
Next-generation nuclear would be a great choice for baseload power, complemented with wind and solar.
Remember my friends…… Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.
Venice, CA Housing Prices Plummet 7% YoY
http://www.zillow.com/venice-los-angeles-ca/home-values/
“Rents drop in San Francisco, Oakland, and San Jose simultaneously”
http://sf.curbed.com/2016/8/2/12356600/rents-drop-san-francisco-san-jose-oakland-zumper
Las Vegas, NV Housing Prices Crater 8% YoY As Housing Correction Expands
http://www.zillow.com/las-vegas-nv/home-values/
“Many of their friends and neighbors sold at a loss or walked away from their homes, but the Jansons decided to stay. When he drives home from work every day at midnight, he skims past signs for sparkling new houses — Harmony Homes! The Preserve! — but the house is all the family has. ‘What we have is what we’re sitting in,’ he said.”
At least they are making their payments and sticking with their obligations, even if they made a mistake years ago. People make mistakes but how you deal with them defines who you are.
I personally know two families (sadly, related to me) who let themselves get caught up in the previous housing mania. Overpaid for their houses, etc. After the crash, they still had their jobs and could still make the monthly payments, but they decided for themselves that because they were underwater by a significant amount — they walked away, mailed the keys to the bank, moved away to new towns.
The mentality is pervasive in our society now. If you screw up in life, just walk away. Screw someone else instead.
Talking to these people now — they brag about it, as if it was the best decision they ever made, and they are proud of themselves for doing it. I just smile and keep my mouth shut.
Trump filed BK 4x, what does that say about him and his sheeple?
Obama doubled this, what does that say about him and his sheeple?
U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - -
the bush wars are expensive and the bush tax cuts….
know your party
Dem and Repub ARE the same party when it comes to the money. And there my friend is the rub.
Just look how well they cooper…er.. uh corroborated in 1999 to abolish Glass-Steagall.
The fish rots from the head first.
“Last Christmas, her husband, Kevin Janson, 56, lost his $20-an-hour job as a security guard at MGM Grand and took a replacement gig at a downtown casino for $12 an hour. Josephine Janson was getting fewer and fewer hours at the jewelry counter at Kohl’s.”
These people should be in a single wide in a trailer park, not a $300k house.
I completely disagree. If somebody wants to voluntarily go through foreclosure, it’s their prerogative.
Precisely. Further to the point; we’ve encouraged a handful of people to let go on the rotting, depreciating house and go on with their lives. And yes they could easily afford it. And they’re far better off. One couple who recently walked away reduced their shelter expenses by 75% and now have far nicer shelter….. rented shelter.
for every loser, there is a winner
Why buy it when you can rent it for half the monthly cost?
Renting is always better than buying, especially at these prices.
“I completely disagree. If somebody wants to voluntarily go through foreclosure, it’s their prerogative.”
A decission made a loy easier by the Mortgage Forgiveness Debt Relief Act of 2007.
Home Foreclosure and Debt Cancellation
Update Jan. 5, 2015 — The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.
This provision applies to debt forgiven in calendar years 2007 through 2014. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
https://www.irs.gov/uac/Home-Foreclosure-and-Debt-Cancellation - 59k - Cached - Similar pages
Who got screwed if they walked away? The banks?
A guy I know has been renting through bubbles one and two. His LL just raised his already too high rent and told him he was getting a deal because the market was blah blah blah. Same sh#t, he has a wife and kids, wants a decent house in a decent hood where his kids are going to school.
He is looking at a house in 33458 that is overpriced and would need a fairly substantial amount of work and money to make it livable for his family. The mortgege payment would pencil out the same as his rent before adding a bathroom plus additional work.
I reluctantly bought in the same zip over 4 years ago but I damn sure wouldn’t do it today because the prices have exploded since then. I know the right thing to tell him is don’t do it but what the hell do I tell him when he asks…
When will the prices drop?
I am happy to say that I just purchased gasoline for $2.199/gal.
Less pain at the pump
Why gasoline prices are falling
By Rob Nikolewski | 5:31 p.m. Aug. 2, 2016
FILE - In this Nov. 12, 2014 file photo, Lydia Holland replaces the gas nozzle after filling up at a gas station in Sacramento.
(AP Photo/Rich Pedroncelli, File)
Low oil prices may be battering energy companies and spooking investors on Wall Street but they are translating into good news for motorists as gasoline prices are falling, even in the heart of the summer driving season.
The price per gallon in San Diego fell to an average of $2.77 Tuesday, according to AAA.
That’s 6 cents less than one week ago, 17 cents cheaper than one month ago and a dramatic drop of 30 percent from $3.976 at this time last year.
Gas prices have been “creeping downward more than racing” down, said Marie Montgomery, spokesperson for the Auto Club of Southern California, “but hopefully in the coming days and weeks we’ll be seeing some more price decreases.”
AAA’s average price for a gallon of gas in California is $2.717, a drop of 19 cents from one month ago.
That’s a far cry from the $4.659 average price California drivers were paying in October 2012.
An assortment of reasons explain the price drop.
…
Hallandale, FL Affordability Surges As Housing Prices Tumble 6% YoY
http://www.zillow.com/hallandale-fl/home-values/
You guys see this one?
The shiny Millennium Tower in San Francisco is sinking and tilting badly.
http://sf.curbed.com/2016/8/1/12341914/millennium-tower-sinking
…
tldr: They built it on sand/mud and didn’t go to bedrock.
I guess even the rich get screwed sometimes, and I have no particular schadenfreude towards the people who bought into that building, or rich people in general.
That entire building probably just lost a lot of value, I wonder how much. Would be interesting to track pre-and-post sink valuations to see how much everyone is losing because of the shoddy construction.
I’d be worried about the water and gas pipes running through the tower, all of them under more stress now and higher chances of them bursting and turning the place into one big mold-tower.
To me, that story is a metaphor for the larger world we live in these days. They didn’t go to bedrock because of cost cutting.
Romans clipping their coins, everything is becoming “thinner”.
The Leaning Tower Of LolaLand
“The shiny Millennium Tower in San Francisco is sinking and tilting badly.”
Wow… a lawyer’s wet-dream.
Only if someone is insured or has deep pockets…..otherwise it is Caveat Emptor!
“They didn’t go to bedrock because of cost cutting.”
And it has nothing to do with not being able to afford it, and everything to do with greed and bloated executive pay.
Certainly not because they couldn’t afford it. If I were an owner there, I’d be seriously wondering what else was done poorly by the builders. I wouldn’t even want to live there. (Note to self: Avoid buying into high-rise buildings in the future).
Bloated executive pay is one thing. What gets me are the golden parachutes — all the clauses and provisions in their job offers that guarantee, no matter even if they are fired, they walk with everything. It is rampant especially in the bay area and tech companies.
The bad part about it is that it creates zero incentive for them to build the business. It is simply bad business. All they have to do is just show up to meetings, become Yes men/women, play around with org-charts, and walk away rich even if they are fired. That is not true capitalism in my mind, not how I think of it anyway. Performance counts. These people are drains on the system.
Oh, one last quote from that Tower article:
“As for fixing this frightening issue, not a lot can be done. Talk of pumping cement under the building is one Band-Aid measure being tossed around.”
Sounds like every single building built in N. Texas in recent decades. The boomingest area of the country, filled with buildings with cracked foundations due to improper construction.
I should post some pics of my apartment complex. Built in 2009, cracks everywhere you look. I find myself wondering which building pipes will burst in next.
Yes, post links to some pics!
I myself recently exited the housing market. I purchased my first house 4 years ago (I did it wide awake with open eyes), and just sold it a few weeks ago. I am very happy and very lucky to be out, with a good tax-free profit. I will not be buying again any time soon. I will enjoy my debt-free life again very much.
Counting my blessings.
Moved into a “new” apartment building — it was built back in 2006 at the height of the prior boom. 3-story buildings, 4 apartments per floor. I am renting again. On the surface it is a pretty nice place, nice cabinets, fixtures, double-pane windows — but there are definitely cracks in the floorings or somewhere that can’t be seen. Any time any of the surrounding neighbors cooks, it permeates the entire building. Sometimes it is a bit like living in a restaurant. So I am learning new skills in proper ventilation techniques. LOL. My solace is, I traded all that risk exposure for some occasional unpleasant smells. Such is life. I can move again very easily if I so choose. It is much easier than having to sell a house. Ugh. I don’t ever want to do that again!
Make sure they actually poured a foundation on that bad boy.
home equity is the backbone of the economy!
Let me guess- you like taking your credit card to casinos?
No surprise that as ‘Muricans have become progressively stupider, we’ve gotten fatter, too.
http://www.cbsnews.com/news/americans-weight-gain-since-1980s-startling/
they dont have any time to cook because they are busy be debt serfs.
Obesity is considered a disease today… not a self-control issue. Health insurance companies can’t use the BMI to rank their customer’s monthly costs… against the law. No way to turn this ship around.
Wonder why we get beat? Attorneys!!
http://www.commonwealthfund.org/publications/press-releases/2010/jun/us-ranks-last-among-seven-countries
Household Formation Plunges To Record Low
http://ftalphaville.ft.com/files/2014/12/HHFGS.png
How’s that vote for hope n’ change working out for ya, Millennials?
http://www.zerohedge.com/news/2016-08-03/half-millennials-live-paycheck-paycheck-most-dont-think-they-will-ever-become-millio
B.T.Express — Do It Til Youre Satisfied:
https://www.youtube.com/watch?v=_FViY4–5nY
Whatever it is
Got popcorn?
http://wolfstreet.com/2016/08/03/vancouver-housing-bubble-bc-15-percent-transfer-tax-foreign-buyers/
“Head to the northern fringe of town, where waves of new homes run abruptly into an eternity of desert. The Jansons live here, in a peach-colored house they bought for about $290,000 at the height of the bubble. They are all Democrats, and staunch Clinton supporters. They worry that a Trump presidency would be a pipeline to the rich and stifle government programs to help workers or the poor. ‘If Trump gets in there, we’re in deep trouble,’ said Josephine Janson, 55.”
Ben, please follow up with these idiots a few years into a Hillary Clinton presidency. They will be a lot poorer and more bitter, but maybe wiser, too.
If only Donald were allowed to save them….
People that stupid are beyond help or hope.
Indeed they are.
Fundamental transformation alert.
https://www.theguardian.com/uk-news/2016/aug/04/mass-stabbing-central-london-woman-dead-and-injured
Diversity is our strength.
http://www.breitbart.com/london/2016/08/03/buses-attacked-torching-stoning/
Johnson/Weld=impressive
GJ is working for the 1%, but the price of weed will crash, ant Yellowstone will be sold off for fracking
lol@lola
How Hillary will win.
http://www.zerohedge.com/news/2016-08-03/shocking-undercover-videos-reveal-just-how-easy-it-committ-voter-fraud
Hillaryous is unelectable.
You sadly underestimate the stupidity and amorality of the ‘Murican electorate.
Can Hillary win?
http://www.theburningplatform.com/2016/08/03/can-hillary-win/
Donald Trump. A meticulous manager with a menagerie of magnificent milfs.
Clint Eastwood just flat-out rules.
http://www.shtfplan.com/headline-news/clint-eastwood-unleashed-were-really-a-pussy-generation-fucking-get-over-it-sad-time-in-history_08032016
First daughter Sasha Obama is getting a summer job at a takeout window. Good for her. I like this kid and her work ethnic.
http://www.bostonherald.com/entertainment/inside_track/2016/08/sasha_obama_lands_summer_job_at_vineyard_seafood_joint
Rally that base, baby!
New York Times on why they didn’t cover Hillary Clinton lying to Mike Wallace.
Well, we already knew she lied so when she lied again about her lying we didn’t think it was a story.
Judge Napolitano: Clinton Lied Again To American Public About Her Emails
“…lying about lying…”
Randy DeSoto August 1, 2016 at 2:50pm
Fox News senior judicial analyst Judge Andrew Napolitano took Hillary Clinton to task on Monday for lying to the American public about her email server, yet again, in an interview over the weekend.
Fox News Sunday host Chris Wallace played three clips to Clinton of her making different statements about her emails. First, in March 2015, she said there was no classified information on her email server. In July, she changed her story to say, no information was classified at the time it was sent or received. The next month, the former secretary of state modified her story further claiming no emails were “marked classified” at the time they were sent or received.
Wallace then turned to Clinton and pointed out that FBI Director James Comey, after a long investigation, found none of those statements that she told the American public were true.
“That’s not what I heard Director Comey say,” Clinton replied. “Director Comey said that my answers were truthful, and what I said is consistent with what I have told the American people. There were decisions discussed and made to classify retroactively certain of the emails.”
“Shockingly, Boards of Directors Encourage this”: Gallup CEO
by Wolf Richter • August 4, 2016
Why this economy is so rotten to the core.
http://wolfstreet.com/2016/08/04/acquisitions-share-buybacks-financial-engineering-fail-to-produce-organic-economic-growth/
“stifle government programs to help workers or the poor.”
i.e. people who shouldn’t have buying houses in the first place. As the article demonstrates, this is a good way of buying votes while screwing honest and competent taxpayers so as to bail out stupid home buyers who bought because the government manipulated the housing market in all sorts of stupid ways.