Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Ah, you're right nativeDallasite. Maybe I was thinking of "girth"
And Frudy, I'm not talking about bailing out this particular neighborhood or half of Mecklenberg County. I'm talking about working to prevent this type of disaster from happening again. Sure, it might seem fun to watch from the comfort of your laptop computer, but there are millions of people who are getting burned by these practices, and having their entire life savings wiped out. How that will come back to haunt us over the next decade might just sink us for a very long time.
If you read the linked articles, it was a combination of shady real estate deals, predatory lending, poor construction, illegal kickbacks to Realtors by the builders, and a host of other fraudulent activities that lead to this result. On top of that, runaway planning also seems to be part of the problem. I'd just dismiss it as a one time deal normally, but why does it seem like the EXACT SAME THING is popping up in neighborhood after neighborhood across the country? And why so widespread? Where is law enforcement? Where are the planning boards? Where are the leaders? Was it just a culture of easy money? Were they complicit? Or were (are) there deep fundamental issues at work?
Personally I think the pendulum has swung too far toward "free market economics", and we're just seeing the results happen all around us and scratching our heads and our arses trying to figure out what happened (and pointing the finger at everyone else). Sorry to say it, but we all collectively brought this on ourselves. The current culture we live in needs to end, and soon.
This wasn't brought about my free market economics. Fannie Mae and Freddie Mac are mortgage companies whose implied gubmint guarantees pumped up the speculative buying of their financial instruments.
Regulations were already in place and were not enforced. As for why they weren't, it was because of parasite lobbyists (NAR isn't to be excluded from this either with their constant attempts at finding ways to price fix) and their ties to Washington. The free market works. Unfortunately, that's NOT what we saw on the way up when you come right down to it.
I would never subscribe to a socialist agenda masquerading as "helping out the little guy" or "stabilizing the economy". Regulations are acceptable. Handouts are not, but you've already established that you are not pro-bailout.
This wasn't brought about my free market economics. Fannie Mae and Freddie Mac are mortgage companies whose implied gubmint guarantees pumped up the speculative buying of their financial instruments.
Regulations were already in place and were not enforced. As for why they weren't, it was because of parasite lobbyists (NAR isn't to be excluded from this either with their constant attempts at finding ways to price fix) and their ties to Washington. The free market works. Unfortunately, that's NOT what we saw on the way up when you come right down to it.
Sorry, but you can't blame it on the lobbying groups, unless you want to say that they helped Washington look the other way so that they could exercise (bend) their "free market rights" without intervention. Just like you can't blame tabloid journalists for printing what they do. It takes a complicit and greedy public to drive this train.
The failure wasn't in the free market, it was in the attempts to prod the free market into directions it wouldn't naturally go. The government encouraging home ownership isn't bad on the face of it, but the combination of lower standards in lending, unscrupulous mortgage lending (evidenced by the the articles linked to above), and ignorance or greed on the part of buyers led to the free market being manipulated. People that the free market wouldn't lend to under normal circumstances found ways to get loans and now everyone gets to pay the price.
The reliance on credit and the apparent belief that credit is the same thing as an asset is not leading us anywhere good in the U.S. When you buy based on the maximum monthly note (and in this case, the immediate monthly note as opposed to the future monthly note) you can pay, and when this figure replaces the actual cost of a product or good as the determining factor in what you buy, you set yourself up for disaster.
The people I feel for are those who did the right things (saving up a down payment, getting conventional type mortgages, buying a house that met the 2 to 3 times yearly income test for their income level) and are now sitting in neighborhoods that are falling apart. They can afford the note on their home, but it sounds like their living situation is bad and going to get worse as these neighborhoods decline.
If my tax dollars were in play in this situation, I'd vote for condemnation of the abandoned properties followed by bulldozers and dump trucks. Starter homes on estate sized lots!
Stupid question, but where are all these people moving to now since they're out of these homes. I see a lot of empty homes, but where are the people? Were there that many empty apartments just waiting for these people to move into, or are the apartment rent prices going to increase because of this 'influx'?
I lived in the Ballantyne area for a few months this spring/summer before moving on, and used to bike around the area south of the city quite extensively. The amount of new housing construction going on was just unbelievable, and more was going on in SC and North of the city. It would be hard to believe that they don't have a tremendous over supply....
You got to love it. Everytime the "free market" gets loose and screws the pup it is someone elses fault. The fact is, and remains, an unrestricted free market does it exactly what it is supposed to...it maximizes profit at the cost of everything else. That is why one always want a relatively "free market" with sturdy checks to keep it honest and going in useful directions.
All the free market needs to do this kind of blow up is enough license.
I have been steering clients hard away from certain tracts since 2004. It was clear what was going on Builders where selling 10, 12,14 houses in a tract to a single individual or family. The result was certain. High foreclosures and extensive rental activity. A few rentals in a Single Family Neighborhood are OK...a lot almost always turn into a disaster.
Whose fault. It is pretty narrow. The biggest offender was the builder who rode the upswing hard and had far more to do with driving the prices up than any other group including the Realtors. The Banks get a piece of the action. Any time someone gets 5 or 6 owner occupied mortgages something ain't right.
In Vegas we should have a special place for the individual California investors who leveraged their appreciation into multiple purchases in Las Vegas. And virtually all got out in time and went on to do the same thing in Phoenix. The locals who bought the flipped places are the ones who end up in foreclosure.
I think many of those tracts are now effectively guaranteed slumhood. There simply is no viable mechanism to fix it. And as the neighborhood deteriorates it drags down those who did not do anything dumb.
In Vegas we should have a special place for the individual California investors who leveraged their appreciation into multiple purchases in Las Vegas. And virtually all got out in time and went on to do the same thing in Phoenix. The locals who bought the flipped places are the ones who end up in foreclosure.
I looked at some houses in Scottsdale last year and there was this small sub division with about 20 houses in it. I soon found out from one of the neighbors that a surgeon from California owned all of the six houses that were for sale in the subdivision. And these were all million dollar properties. Last time I looked they were still for sale. At least his bank is happy for now.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
