Posted on 09/12/2009 7:12:18 AM PDT by Son House
As you may have guessed, rising unemployment accounts for many home foreclosures. That's turning many people from homeowners to renters.
Judy Heller and her husband spent 24 years in their Rochester home, raising their kids. But they're moving out soon.
"It's too expensive, we can't afford to stay here and my husband had looked for a job around Rochester but most of them are minimum wage, and you can't survive on minimum wage now," Says Heller.
They're moving to an apartment in the Twin Cities, where her husband's found a job.
Down sizing means living in a smaller place, and letting go of possessions they've had for decades.
“When you move from a 6 bedroom house to a one bedroom apartment, you don't take a lot with you," she says.
Heller's story is not uncommon.
Landlord Jeff Allman owns the "Residences of Old Town Hall" apartments off East Center Street near downtown Rochester.
He's seeing layoffs hit people first-hand.
"We've had some people lose their jobs and we had to help em' find an exit strategy to complete their lease," says Allman.
He says now some families are "doubling up" in apartments.
"We had some situations where a single mother and two kids in a two bedroom apartment - brought in her sister and her 2 kids," Allman says.
More and more homeowners are turning back into renters; people like Judy Heller.
She says the toughest part is something very practical.
"Just getting used to living so close to other people, I've never lived in an apartment so it's a big change."
A tough change she and many others are making, because they have to.
>>Why send your rent down a rat hole when you can put your money into equity in a house.
Course 99% of people borrow the money to buy the house and send rent on that money down a different rat hole.<<
The counter argument is that in the long run, owning a home is the best investment you can make. Real estate has appreciated over time and even in “bad” areas eventually recovers and increases.
At the height of the insanity, my home was worth 5 times what I paid for it. Now that things are “depressed” it is worth “only” 3-1/2 times what I paid for it and prices are starting to go up again. Since I have never pulled any equity house, that is pure gravy. I will probably sell and move, but I will have enough to pay cash for a new home (in a cheaper area) and still put a ton into the bank.
Or you can stay there and get a reverse mortgage to guarantee your home and income into your dotage.
If you buy a house that is proper for your income level, and don’t use it as a financial tool, there is no better investment.
>>Hopefully they got something positive like helping their kids pay for schooling,,<<
Kids can pay for their own schooling. I did.
There is no need to BK the parents. That is irresponsible on both parents and children.
That's right, everybody rents from the government.
Around here, property taxes supports public education and public education is run by the teachers unions so...we're at the mercy of the unions.
The last property tax increase (for the children) was supposedly for repair of leaking roofs, broken AC's and etc.
Once the voters passed the increase, every cent was used for teachers union administrative raises. Even the teachers felt 'tricked'.
It is for me. I'm in the military. Fact is, society is better served with a large segment of the population mobile, untethered by mortgages and able to quickly pack up and move to where the jobs are.
I remember my Mother as a ‘young’ widow in her 70’s saying “Hallelujah” when she sold her condo and moved into an apartment after being a home owner for decades.
She didn’t realize all the little to big things my Dad did each day to keep their homes in proper living conditions. First she sold the house they lived in and bought a condo not to have yard work. After 3 years the homeowners fees were outrageous and the condo needed a lot repair that my Dad would have done.
She then rented a good two bedroom apartment for about a decade until she needed to be near some relatives. Then, she rented a nice condo with a two year lockin rate. When they tried to raise her rent, she moved into a retirement home for her final years.
Some of our younger and single relatives or young couples with no children have been able rent better places for less $’s and be closer to work or a rec area with the drops in rent prices.
Fact is, society is better served with a large segment of the population mobile, untethered by mortgages and able to quickly pack up and move to where the jobs are.
And thanks.
I'm in the military.
ditto
Renting is a hardship? sob sob
Remember the example of Maggie Thatcher selling off Council Housing (The Projects) to tenants at greatly (I mean greatly) discounted prices. It drove the lefty Labour Party insane with rage (why?), removed the cost of maintenance from the cities, and created a much more balanced political outlook in the new owners.
by: Jason Kelly September 11, 2009
TCW Group Chief Investment Officer Jeffrey Gundlach said at a June 2007 Morningstar conference, "The subprime market is a total unmitigated disaster and it's going to get worse. The delinquency rate is still climbing. At the same time, the ability of people to refinance is also going down. It's just not a very attractive situation." The S&P 500 traded at 1,500 back then.
On Wednesday, in a conference call titled Too Good to Be True, Gundlach said of the current market that it was about to lose momentum, and advised selling on strength when the S&P 500 is over 1,000.
"You've made 90% of the money you're gonna make in this rally," he said. He thinks much of the economic data that people are calling green shoots is just the temporary result of unsustainable government spending. "We're basically borrowing money and calling it economic growth. It's not real economic activity."
[snip]
Ditto.
There are a lot of reasons to go from owning to renting. Our house mortgage wasn’t beyond our means, but (i) my husband lost his job; (ii) his mother lives with us and the distance from the house to all her activities was becoming a real issue; and finally (iii) the company I work for closed its doors.
The saving grace was that my clients all signed contracts with me and my husband and I have started our own business. We needed to be closer to the city for both the fledgling business and for my mother-in-law. We exited our mortage legally and with some grace (but not without monetary loss) and are renting a place in the city that meets all of our needs for considerably less than the mortgage payment. Because we were no longer “employed” we couldn’t renegotiate the mortgage to take advantage of the much lower interest rates.
I don’t like living in the city, but I don’t see it as forever and you do what you need to do.
When we originally bought the house, the sellers had to bring money to the closing. They had taken all the equity out of the house to send their children to college and to buy a condo that fit their empty nest lifestyle.
This is the plan. The government is getting back in the public housing business anyway.
We can all live in shoebox Soviet style apartment buildings while the political and moneyed elite live high on the hog.
“We’re basically borrowing money and calling it economic growth. It’s not real economic activity.”
^
Nailed it! (Now I’ve got a belly-ache...)
Yes, I was talking it over with finance guy, and came to a question of;
Will inflation increase the amount of my stock holdings in IRA over the loss of companies that go out of business if Democrats remain in the Majority next Congressional election?
I sold my house and moved to renting because of coming inflation. Better for your rent to be cheap than your house be cheap.
They don't mention how many re-finances and/or equity lines of credit. That's the problem.
Yes, well there are many factors here including people who purchased homes who never should have along with people who have been overwhelmed with bad luck and don’t have the support structure to see them through. The rule of thumb used to be as long as you were only staying in an area for three (five, six?) years, renting was the wiser option.
Chances are they mortgaged it to the hilt and used the money to buy extras. Then instead of concentrating on paying the house off first, they bought the new car, new boat, new wardrobe, vacation in Bahamas, etc. Plus stuff for the kids too.
They didn’t think ahead.
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