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manonfire
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Posted: Mon Dec 1st, 2008 09:37 pm |
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Tyrrho wrote: manonfire wrote: Tyrrho wrote: manonfire wrote: Carol2 wrote: Merlin wrote: That's because 12 million households now owe more than their homes are worth, according to Moody's.
And that's the kicker.
Yep, that can happen when folks buy homes they can't afford to be in.
It can happen any time housing prices fall dramatically, whether folks can afford the homes they bought or not.
I don't see what one has to do with the other.
If you buy a house with a 20% down payment, and then the value of the house declines by 25%, you will owe more than your house is worth. Note that this has nothing to do with whether you can "afford to be in" the home you bought or not.
So, what are you saying, that people should walk away from their mortages because their house is worth less than when they bought it?
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Hyper, Limana, A2, and Evelyn, put your glasses down, and step away from the Kool-Aid!
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Merlin
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Posted: Mon Dec 1st, 2008 09:53 pm |
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I know a person
All of the anecdotal "evidence" presented here does not lessen the fact that we have been in a recession since December of 2007 and the number of people getting fired or laid off from their jobs across the nation continues to rise.
Florida is approaching 7% unemployment now.
Here's some anecdotal evidence for you:
I just stepped away from talking to a young man who was laid off his electrician's helper job 3 weeks ago.... he spends every day going from job site to job site, asking if they have work. Every one of them told him they're laying off too. My daughter just had to start driving 120 miles a day round trip because her company is down to one job site, and they're a major electrical company. (EDIT) He just showed me a list of 96 contractors in the South Florida area. He has either called or visited in person, 72 of them. None are hiring.
Any time there is a job fair here of any kind, thousands of people line up for a few jobs.
I find it hard to believe that there are jobs on every corner and everybody is just refusing to take them. It might be that way where you live, but it's not here.
Last edited on Mon Dec 1st, 2008 10:46 pm by Merlin
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"Christians should go to church."
"... it would be better for her to tie a heavy rock around her neck and jump into the midddle of deep bayou than it would to lay a heavy guilt-trip on any of God's little ones . . ."
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Tyrrho
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Posted: Mon Dec 1st, 2008 10:19 pm |
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manonfire wrote: Tyrrho wrote: manonfire wrote: Tyrrho wrote: manonfire wrote: Carol2 wrote: Merlin wrote: That's because 12 million households now owe more than their homes are worth, according to Moody's.
And that's the kicker.
Yep, that can happen when folks buy homes they can't afford to be in.
It can happen any time housing prices fall dramatically, whether folks can afford the homes they bought or not.
I don't see what one has to do with the other.
If you buy a house with a 20% down payment, and then the value of the house declines by 25%, you will owe more than your house is worth. Note that this has nothing to do with whether you can "afford to be in" the home you bought or not.
So, what are you saying, that people should walk away from their mortages because their house is worth less than when they bought it?
No, I think people should honor their commitments if they are able to. I'm just saying that it isn't always their own fault if they are not able to.
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This year I resolved not to make any New Year's resolutions.
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Evelyn
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Posted: Tue Dec 2nd, 2008 02:17 am |
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Tyrrho wrote: manonfire wrote: Tyrrho wrote: manonfire wrote: Tyrrho wrote: manonfire wrote: Carol2 wrote: Merlin wrote: That's because 12 million households now owe more than their homes are worth, according to Moody's.
And that's the kicker.
Yep, that can happen when folks buy homes they can't afford to be in.
It can happen any time housing prices fall dramatically, whether folks can afford the homes they bought or not.
I don't see what one has to do with the other.
If you buy a house with a 20% down payment, and then the value of the house declines by 25%, you will owe more than your house is worth. Note that this has nothing to do with whether you can "afford to be in" the home you bought or not.
So, what are you saying, that people should walk away from their mortages because their house is worth less than when they bought it?
No, I think people should honor their commitments if they are able to. I'm just saying that it isn't always their own fault if they are not able to.
And there is a drag on the economy if people are stuck in a house and can't move to pursue a better job opportunity elsewhere, or can't take a promotion if it entails moving, and so on. Elderly people who want to go into a retirement home may not be able to sell their house and can't move to the next stage of life. And so on. There are many negative consequences to falling home prices.
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Cajun
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Posted: Tue Dec 2nd, 2008 07:29 pm |
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Merlin wrote: I know a person
All of the anecdotal "evidence" presented here does not lessen the fact that we have been in a recession since December of 2007 and the number of people getting fired or laid off from their jobs across the nation continues to rise.
Florida is approaching 7% unemployment now.
Here's some anecdotal evidence for you:
I just stepped away from talking to a young man who was laid off his electrician's helper job 3 weeks ago.... he spends every day going from job site to job site, asking if they have work. Every one of them told him they're laying off too. My daughter just had to start driving 120 miles a day round trip because her company is down to one job site, and they're a major electrical company. (EDIT) He just showed me a list of 96 contractors in the South Florida area. He has either called or visited in person, 72 of them. None are hiring.
Any time there is a job fair here of any kind, thousands of people line up for a few jobs.
I find it hard to believe that there are jobs on every corner and everybody is just refusing to take them. It might be that way where you live, but it's not here.
Pessimist me knew we were in trouble about two years ago. And I think the unemployment rate will get even higher than it currently is.
From people I've talked to, and things I've read, it's believed that the rate will top out around 10-15%.
And I don't doubt that there are areas in the country where it's very hard to find work, especially for those willing to work at anything they can do.
And when you cannot find a job in the sector that you're trained or experienced in, much less what you "want" to do, then it's time to suck it up and be willing to find any work you can, even if it's not what you really want to do or would prefer to be making. Moreso, unless you've got plenty of savings to see you thru until you can land that perfect job, I find it ridiculous that people go about hunting for work, weeks and/or months on end, while watching their finances get more and more difficult. You apply to at least two temp agencies, and while working temp jobs, bringing in some sort of income in the interim, then you go seeking out that sweet job.
My step-mom lives half-way out on the North Shore of Long Island and works on the Western edge of Queens. She's in her early 50s with MS and has driven to this job that she chose almost 10 years ago, spending easily 3-4 hours round trip. 120 miles round trip for a job? Big whoop. I've known plenty of people who commute similarly for work and/or school, and that was well before the economy was an issue.
Last edited on Tue Dec 2nd, 2008 07:38 pm by Cajun
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Carol2
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Posted: Tue Dec 2nd, 2008 08:33 pm |
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Merlin wrote: I find it hard to believe that there are jobs on every corner and everybody is just refusing to take them. It might be that way where you live, but it's not here. Do you regret giving up that high paying phone consultation job you and Cathy used to have?
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The righteous shall live by his faith (Habakkuk 2:4).
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AyHyperbole
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Posted: Tue Dec 2nd, 2008 09:40 pm |
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Merlin wrote: I find it hard to believe that there are jobs on every corner and everybody is just refusing to take them. It might be that way where you live, but it's not here.
There are definitely jobs here, but they tend to have some prerequisites.
When that unemployed boarder was living here, I tried to find a job for him on Craigslist, and, lo and behold, he wasn't qualified for a single thing. Hundreds and hundreds of jobs up there, none of which he could do.
When you have no computer skills, no office skills, no retail experience, and no car, things can get tricky.
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HardyHeaven
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Posted: Tue Dec 2nd, 2008 10:38 pm |
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Just a couple of random comments:
-- In a good market, a person generally needs to own a home for 3-5 years before it appreciates enough to pay the fees associated with selling it and buying another home. Many of the 'hard' cases that I see right now are people who have owned their homes only a short period of time (less than 3 years), but who need to sell now and still hope(d) to make a profit. That expectation is unrealistic, even in good times. And when I say 'profit' I mean 'enough money to pay off the loan + real estate fees, etc'.
Here's a heads up for some people: The value of your home does NOT equal 'what I owe the bank + the Realtor's commission + the money I put down a year ago (including bank fees and closing costs that came out of my pocket)'. The value of your home is, and I've said this before, what a reasonable buyer is willing to pay for said home on any given day. This is typically based on what other homes in your market area have sold for within a short distance, and within a short time period from when you are expecting to sell your home.
-- Most of our local real estate woes 'trickled down' from major markets like Florida, California, Arizona, Texas and the like. In the past, anyone wishing to make an upward or lateral move could do so easily, because there was a constant influx of people coming in from those states who had sold their homes and were thus ready to buy. Two years ago, we would gladly take a sale-of-home contingency offer from someone coming from Florida, because their market was brisk and we knew it was only a matter of time before their home sold and they could close on our listing. Starting about a year ago, I was getting tons of calls from Floridians who wanted to lease-purchase my listings, because their homes in Florida weren't selling. The mess compounded from there. If my listing doesn't sell because someone from Florida can't sell their house, then my seller can't move up and buy the new home they wanted to buy. I may just be stating the obvious, but my point is that even if you still are in a fairly decent market, there's a good chance that it won't be long before the situation that occurred in the major markets effects you.
-- To cap on what Cajun is saying ... I'm so thankful now that I took the salary + commission job that I did back in mid-October, even though the salary part is very, very low (compared to what I was making - or even compared to entry-level wages) and the commission part is, thus far, non existent. I hate driving so far (an hour round trip), and I hate the idea of working for someone else, but I'm telling you right now, I am sooo grateful to even have a job right now. If gas prices go up again, and if I can't sell something to earn the commission-part of the job soon, I'll gladly go to Walmart or to a convenience store, or to make copies in an office for someone, just to put food on the table for me and Jada.
-- I don't know if it's a good thing or a bad thing, but I will tell you that being broke this year is different (for me) than being broke this time last year was. Last year, I had people around me who were in a financial position to help me, and that was good. But I still felt like a worthless piece of crap for having to ask for help. This year, everyone is hurting, so while there aren't many people left who are in a position to help, and there are more people like me with their hands out, at least I don't feel so alone and worthless for asking. Like Cajun said, I, like everyone else, have lowered my expectations and tightened my belt. I'm more grateful for less stuff than I ever have before. For instance, Jada and I were given two tickets to an AIDS benefit concert for this evening. I'm very, very, very grateful to be part of a community, any community. And I'm very, very, very grateful for an opportunity to get out of the house and enjoy a little music. Little things mean a lot more to me now. I don't have to sharpen my pencil to make a gratitude list as finely as I did this time last year.
Anyway, I'm rambling. Sometimes I'm glad that people skip over long posts such as this one. I'm off to a concert. See ya!!
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If you don't know which God to pray to, start with the one you've been lying to all these years. --A.A. Catchy Phrase #372
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