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.
This is GOOD news. One of the big problems with the housing bubble was the incentive for people who ought to have been reting to buy instead. We heard it all the time said to renter friends: “you’re throwing your money away” because of the mortgage deduction. Many thousands bought houses they couldn’t afford because of this perverse distortion of the markets. Yes of course if was their fault. But the lesson is clear: eliminate the mortgage deduction, or create a renter’s deduction. To keep the current system is unfair and a disruption of free markets.
I once tried to get a small loan so I could get a car and find a job. Since I didn’t have a credit history or job I couldn’t get a loan.
Meanwhile some idiot easily got a loan for a house they couldn’t afford and now they have lost their shirts.
“people who have been overwhelmed with bad luck and don’t have the support structure to see them through.”
Who I have no problems with helping out.
“Our neighbors are suffering because of the lack of jobs in the free market.”
Minor correction: We don’t have a “free market.” We haven’t had one for some time. That’s a big part of the problem.
I saw it stated another way last week:
"The government is throwing $250 billion of borried down a black hole each quarter and the minute they stop, the system will collapse."
We pay our real estate taxes quarterly. Four times a year I personally go to our county tax collector office and say loud enough for many to hear, "I'm here to pay my rent." It used to draw lots of stares, but now only the new hires drop their jaws.
I agree with every word. I've posted these very ideas many times but not so succinctly.
If you think inflation is high, then you should buy rather than rent, all other things being equal. Rent should go up or down with inflation/deflation, but if you get a 30y fixed-rate mortgage you’ve locked in your cost of housing.
The one caveat would be that there are additional costs of ownership that increase with inflation, like property taxes and upkeep — but those are embedded in rent anyway.
Personally, I think we’ll see higher inflation in general, but continued deflation of house prices. So ultimately I think you’re probably right that it’s better to rent than own right now.
ANother thing about ownership is the freedom to do what you want with your home (unless you are in an HOA). If I want to paint my daughter’s room, I can. If I want to change cabinets I can. No worrying about a neat freak landlord coming in a few times a year to look around. That’s why I prefer buying to renting.
Well to be fair Bush did go on primetime television telling the country that we needed to hand the terrorist... errr I mean the banks our money. Or else they would bring Armageddon down on us for their greedy behaviour.
Then there’s also the matter of spending hundreds of billions of dollars chasing after WMD’s that never really materialized.
And then there’s the open door policy of H1-B Visas to dilute the American income.
I could go on, but all politicians are so worthless.
Kinda missed the point?
I don’t think the renting part is actually the travesty in the story. I’m going to take a wild guess here. But it’s probably the losing their job and subsequently their home in which they raised their family in for 24 years....
Yeah, I’m guessing that was the hard part...
Maybe they had to pull out equity because a family member got sick and their health insurance wouldn’t cover enough of the medical bills....
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