A comment on the housing situation

[RobinL]

I've repeatedly gotten the feeling here that people feel that the housing situation doesn't affect them. Their jobs are secure, they've saved for a rainy day, they can ride it out and it's not their problem if other people weren't smart enough to read the fine print. Well, I think it's a serious problem that goes well beyond the failing homeowner and one that everyone should be concerned about. Here's a little article about Cleveland from NPR that I think highlights how this goes beyond the banks and homeowners.
http://www.wcpn.org/index.php/WCPN/news/9925/
Here's the first part--

Abandoned houses and vacant lots have cost the state of Ohio nearly $64M million dollars in upkeep and property tax losses. And over half of that expenditure and tax loss comes from Cleveland.

The loss of tax money is going to have a serious impact on the city. And they're expecting more a lot more foreclosures. That's money that won't be there for school and services. Police and fire personel risk their lives everytime they're called to a vacant house. Will federal tax dollars be used to help out the city? Your money? I don't know, but even those who have made wise financial decisions are going to be affected by this.

[Adrienne]

It does affect us personally in that we had plans to sell our house within the next couple of years. the neighborhood we live in is not "the best" and there is one house boarded up on the next street ( a 3 year old home) and one at the end of our street has been for sale for over a year. We would have trouble finding a buyer for our home and couldn't get out of it what we would need to.

I told dh this weekend that the sort of people that would buy into this neighborhod are not able to afford getting into a house right now.

[Julester]

Originally Posted by Adrienne

It does affect us personally in that we had plans to sell our house within the next couple of years. the neighborhood we live in is not "the best" and there is one house boarded up on the next street ( a 3 year old home) and one at the end of our street has been for sale for over a year. We would have trouble finding a buyer for our home and couldn't get out of it what we would need to.

I told dh this weekend that the sort of people that would buy into this neighborhod are not able to afford getting into a house right now.

We aren't stereotyping are we?????

[tracyred]

Originally Posted by RobinL

I don't know, but even those who have made wise financial decisions are going to be affected by this.

I agree with you that the housing situation will have wide-reaching effects in the areas of the country where it is most pronounced, and in many cases, it ties to the state's unemployment rate. Just today, a link on MSN referenced states with high and low unemployment.

I notice interesting trends in the mean annual wages of the two groups. I would wager that wage inflation -- primarily via unions and government jobs that pay above market value -- drives much of the general downturn in these areas. Look at Michigan -- inflated wages for union manufacturing jobs made it impossible for many businesses to continue to compete, and they closed or dramatically downsized. It's simple economics.

I apologize for taking the tangential turn, but it's all tightly interwoven. I'm in an area that's booming economically. We saw a slight downturn in the housing market, but it's already bouncing back, and companies are adding jobs at an unprecedented pace. (Granted, we also never experienced the housing bubble that was so pronounced in other regions.) The growth here is astounding, and companies are trying to court people to move here because they need jobs filled. And yet I'd bet most Michiganders, Mississippians, South Carolinians and Alaskans would rather wallow in unemployed misery than move to where the jobs are.

Sure, it's colder than a witch's you-know-what here for much of the year, but I don't get the mindset of those who would rather lose their jobs, their houses and their future than seize an opportunity elsewhere in the country. I understand the desire to live near family or in a specific locale for whatever reason -- I'd certainly prefer to live nearer my family and my husband's -- but when the job prospects just aren't there and the economy is flailing, sometimes it's necessary just to look elsewhere until things spring back where you'd rather be. I'm sure we'll move back "home" sometime in the next few years and I am thankful that my family and his are in excellent health and don't "need" us where they are, but we're big on taking smart risks, and working here was one risk we couldn't afford to pass up.

[Julester]

Don't you worry about the tax man.....he's gonna get ya one way or another. Yes, they will see a slight decline in "property" tax, however, they will see more than their fair share of business tax revenues. They need to continue to work on the economic development side. Gotta keep the jobs and attract new industries to the area which in turn like a see saw, brings people to the homes etc.

Oh and as far as that BS with the "upkeep" of the property? That is a bit exaggerated.....you are definitely not seeing Joe Gov employee out there pruning a shrub on a vacant property.

[Julester]

Tracyred, you are so right (as if you didn't know! ) the trend these days are to be more "fluid" with your job search and choices. I do think alot of it stems as a "generational" issue. The Gen Yers are more inclined to move wherever they want when they want and how they want.....the days of having the same old job day in and day out until they either retire or die are for the most part over. And I do think that in itself is playing a part in this "crisis". You have people who want to be in the same town, same house, same job for all of their lives. And there is NOTHING wrong with that, but it is those same people who just don't get the ebb and flow of general business and its "quirky" trends. When something goes funky, they freak and think the sky is falling. What they don't understand is that it will be a bump and then it will correct itself.

It is an interesting take.....when you look at Generational differences and how their upbringing/events influenced them. I know I just skewed this whole post....but it does play a part in it.

[Lesley]

you are definitely not seeing Joe Gov employee out there pruning a shrub on a vacant property.

I can't speak for every city and town in every state in the US...but I can speak for the City where I work. We will trim trees when they become in impediment to the pedestrians, we mow down weeds when they are taller than 6", we will hire dumpsters and a cleaning crew if the yard looks like a refuse dump. We will board up and keep re-barding house when transients start using it for a 'camp'. We will drain pools and put up a fence. We call in the Health Department when people have stopped paying water and sewer bills and kept using the facilities anyway...including the tub. We call in animal control for the animals that congregate and breed in the vacant homes...or for pets abandoned and left behind.

Non of that is free, and much if it is needed to safeguard the value of the surrounding properties. Where possible, the cost is added to the property tax so that when the house if finaly sold, it's paid for through the assessment. If the house needs to be demolished (unsalvagable), then the City eats the cost...which can be high when there is asbestos to be removed.

So, I do agree with you in that I don't believe any City is footing the bill to manicure anyone's yard, but there is still a very large cost involved. If the owner on record claims bankrupcy, then all bets are off being able to tack on the costs to the property tax.

[robine]

robinL no offense but your first two sentences sounds almost accusatory..As if saving for a rainy day, buying within one's means, and having a secure job makes one subject to riducle, and hostility..WHY are those bad things to many people here??

[Julester]

Lesley, our County does the same, however, there are many others who do not. They don't have the tax base structure in place to perform all those extra "perks". You and I are the lucky ones. Could that be perhaps that our respective locales are actually managed quite well and are able to tighten up the boot straps without the joe citizen feeling the pinch? Perhaps. But I think it safe to assume that not all locales or states are handled the same. Here in VA you can best be dang sure that you will not see Joe Gov ee putting up fences, cutting grass (unless it is a highway) etc. It is usually left up to the local counties....and quite frankly there are counties who are not set up like the larger ones and do not have staff set up to do the tasks.

[tracyred]

Originally Posted by robine

robinL no offense but your first two sentences sounds almost accusatory..As if saving for a rainy day, buying within one's means, and having a secure job makes one subject to riducle, and hostility..WHY are those bad things to many people here??

I didn't get that from what she posted. I can't speak for her, but I think she was pointing out that some people don't feel the housing market affects them when it actually does -- despite all their efforts to be fiscally careful.

I agree with her on this.

Were I living in a different part of the country, I would likely be extremely upset about the consequences I would face as a result of other people's undisciplined or irresponsible behaviors. Thankfully, the economy in my area of the country -- that part that many coastal liberals disparage as "flyover country" -- is lifting all boats, or at least many of them.