Underwater Homeowners "Here To Stay" Zillow Says

Zero Hedge ^ | 20 March 2015 | Tyler Durden

[trebb]

Real estate and housing is a commodity like precious metals, grains, oil and equities. The markets have their winners and losers. It up to the individual to make the right buying and selling decisions.

Many got caught due to "representatives" telling lies about the state of Fannie and Freddie - even the Market acted as if surprised when it disintegrated. Add that to government mandates that those who couldn't afford the home loans be given the loans, it was a setup that trapped a bunch of folks by design.

[kjam22]

A new car also loses 17% of its value the minute you drive it off the showroom lot.

You're right, but that's an insurance gimick. Go try and buy a used car with only 2 or 3k miles on it. Something that was preowned but for less than 6 months. You will not be able to buy it for 17% of what you can buy a brand new one for.

[kjam22]

Ummm... should have said for 17% less than...

[SkyPilot]

True.

[SkyPilot]

And NJ taxes are so high because of teacher pensions and the Abbott schools, which is nothing but extortion to “give” to Obama’s people. Also, about 1/3rd of NJ teachers flee the state the minute they retire and head to North Carolina or Florida.

[bert]

—— housing starts cratered 17% in February——

during which at least 25% of the American 48 states were covered in snow and in many places commerce in general was either stopped or slowed

The Zillow statement is foolish

[Mashood]

The typical duration (average) of a mortgage is 8 years. Very rarely do people spend 10-20-30 years in the same home.

[kearnyirish2]

Even worse, teachers’ (and cops) current salaries have now made them our upper middle class (never mind what they will cost later). We have a lot of cops pulling down over $100K annually, and they will never draw their guns in careers that may last as little as 25 years (an acquaintance just retired at 46 - after 25 years on the job). Teachers often don’t reach those salaries because they work less than half the year (180 out of 365 days), but they make much more than many of the remaining professionals left in NJ. The whole bloated government workforce was built on the assumption that the good jobs we had in the past would last forever, and now most of them have left the state.

The only people moving in are foreigners who don’t expect to contribute their share of our debt - through working for cash, renting out illegal apartments, or just going straight onto the dole.

[pepsionice]

I personally can’t think of a single area in the US where I’d be willing to settle....pay $1,100 a month for thirty years (with some $75k downpayment). I can’t think of a stable urban area where you could count on significant pay levels and job security for that thirty year period. It’s not like the 1980s where a guy could be on a downsized deal and find a job sixty days later. You could be standing around for a year, and eat up your savings paying the mortgage, and $700 a month on some car payment.

[kearnyirish2]

That’s right; we have people waiting sixty months+ after the layoffs from the start of the current depression (2007), and those jobs and salary levels are gone for the foreseeable future. Anyone I know who lost a job and got another (even if it was the same work) took significant pay cuts; if it weren’t for the much smaller number of jobs available I’d swear that the large financial institutions simply swapped staffs to reduce wages and re-set the clock on accrued vacation time...

Here in NJ the property taxes alone could run you $700 per month; owning the home outright doesn’t prevent you from being sucked dry. The state will freeze your property taxes at 65 years of age, but many can’t retire anyway (since having taxes that are still $750/month will eat up your retirement income very quickly). I work with some women in their late 60s/early 70s that want to retire, but can’t stay in their homes (due to those taxes); they want to sell the homes (which they own outright), but prices are so depressed (due to said taxes, in part) and they need the proceeds of the home sale to move on to greener pastures...

Young people are watching this unfold, and learning quickly; they are leaving the state in droves, or remaining here as childless tenants.

[Gritty]

It is going to be tougher getting out from underwater with Obamajobs and Obamacare leading the economic parade.

[KC Burke]

Some of this upside-down business is arbitrary analysis of sales that will not happen.

If I like the home and don’t plan to sell while paying a mortgage (or having no mortgage), what does it matter what the current value might be today.

[SkyPilot]

The whole bloated government workforce was built on the assumption that the good jobs we had in the past would last forever, and now most of them have left the state.

The only people moving in are foreigners who don’t expect to contribute their share of our debt - through working for cash, renting out illegal apartments, or just going straight onto the dole. Exactly.

I once had a neighbor that worked for both Governors McGreevy and Corzine.

His entire attitude was summed up as such (almost a directly quote as I can remember:

"New Jersey has more millionaire per square mile than any other state. We need to raise taxes even more. People complain about property taxes being raised so much, but they are just ignorant about how incredible and talented the government workers and teachers in New Jersey are in really are. States with low property taxes are redneck states. The pensions and benefits our workers have to be protected, so the citizens of New Jersey are just going to have find a way to pay their fair share. Every time I hear these people complain, I want to scream at them to skip going to the shore every year on vacation. And people complain about the Abbott districts, but without the rich white neighborhoods paying more, what do you think would happen to the districts in poor black and Hispanic neighborhoods? The rich neighborhoods can afford to pay for everyone else, and why shouldn't they? It's only fair."

[kearnyirish2]

I can believe that; what does he think of the flight of the millionaires, as well as many of the non-black and non-Hispanic taxpayers, out of NJ? The problem is that very average neighborhoods have very high taxes, we don’t have talented government workers & teachers, and the pensions (?), benefits, and jobs of the taxpayers themselves are completely unprotected.

I hope that same neighbor can forgive the taxpayers of NJ for failing to find a way to pay their “fair share”; this state is getting crushed, there is no recovery in sight, and anyone not on the gubmint bandwagon (through welfare or workfare) is looking for a way out...