Economic pondering of the littleman

[puros_bran]

Been pondering on the housing market a bit tonight. Let me run this by ya, comments welcome.

We've had a house on the market almost a year now. The house is rather modest yet appraises for 180,000. The best offer in twelve months has been a bit over 80g with the provision that we sign away our 'right of way' or 'pay' them 14g. This in light of the BRAC agreement that is bringing almost 3000 civilians into the area to service Ft Knox? Now the house is paid for and I can and will sit on it before I give it away. What about Joe Average setting in a house he's paying a 200g note for that he can't unload for 100g? He's already upside down 100g, if a typical American he has little or no savings,zero job security, and no retirement other than a hope of social security and a paltry sum in his 401k. How's he going to make it? I heard on one of the news shows that there was 1 forclosure per every 134 family last year. How's the bank going to make it? They can't sale the propertys without taking even more a loss than I would.
The bankruptsy laws have been changed to make it a lot harder to default on a note you can't pay, if you don't have equity your basically renting. If you don't hold several months salary in savings, or have tons of insurances most of us can't afford even something as simple a broke leg could make ya homeless. Its really scary when you sit and think about the fragility of the whole system.

 

[Justpipes]

All I can say is that it is messed up! That about sums it up.

 

[Tony Ferrill]

And that is exactly why I try not to think about the fragility of the whole system!
We have a paper tiger here,PB;our economy is(was?)fueled by the little guy for a long time,even large European banking institutions would buy into "The American Dream"because of the perception of security in the deriveratives and other products in the mortgage market.
Ugly greedy lending,shipping good paying jobs out of the country,inflation all worked to pull down this house of cards,and you got it right-a broken leg would destroy my family's finances;as would a strike over this year's contract negotiations.
We own a note,and have a 50,000 dollar rental home which is paid for.Our note is OK,7% for 30 years,and we could hang on to the house and eat rice for three months(my fault-want to not see the fragility of MY part of the whole system and act like I have guaranteed income).The second home,I paid 47000 cash for in 2002,is in reality worth $30,000 now.
If we work hard and save our money and not be too lavish in lifestyle,we'll be OK,won't we?? :roll:
I pay cash for everything,except my wife's grocerywagon/kidmobile.And our new house.Our REASONABLE new house-worth two years of my gross wages.
The oldtimers values were there for a reason.My folks did well,are still doing well.At 80,Dad still deals in ground and makes money.His dumbbutt kid(me) is trying to listen a little more closely now to what he has to say-because of the fragility of the whole system!
Bless your heart,PB-turn up the metal in that cab,or count your breaths,or anything-this line of thinking will drive you nuts!!!!And don't even give a fleeting thought to the Social inSecurity mess.......which you and I have heavily invested into for what,30 years.....fuel prices(energy costs in general,not to mention your interest in diesel).....educational dumbing down of the kids......
We may be on the verge of somewhat of a crisis if I read all this right.
Tony

 

[Carlos]

What is screwed up, in addition to everything else, it's easier for the average working Joe to buy new than to buy old.

When banks started lending money for pleasure boats, bass boats, out to 15 years, they destroyed my ability to sell my used boat. It became cheaper, per month, for a guy to buy new and pay 15 years on it.

My mom bought a house near Snellville, GA. Build in the middle 1980's and sitting on an acre. Roughly $150g. Developers are building huge numbers of homes down there. Everywhere around her. Not hundreds by the looks of it, but thousands. All starting at $600g and up. How can families afford to buy those? Just make interest payments all their lives and hope insurance pays it off when they kick the bucket? Or they go back to the banks. The banks just became long-term landlords renting, with the illusion of selling.

Definitely screwed up.

 

[Puffy]

I sold a house two years ago for $30,000 less than my asking price just to get rid of it.The value of that house has dropped another $15,000 since then.The value of used homes is on the decline.The prices that new houses in the area where I live though continue to get higher.I can't figure it out,but that's the way it is.

 

[puros_bran]

The jobs are leaving the country becaue 'We the People' have elected and funded a giant meddling machine.
I'd love to open a shop to build radio gear. Can't do it though. Between the EPA regulating what and how I use umpteen number of products, OSHA telling me how to run the shop, The State (through zoning) tells me where I can build a shop, Social security,Workmans comp, would nail me, don't forget the FCC they'd have their hand in it, and I'm sure if I had a brainfart and actually invented something Homeland security would have to check it out. At the price I'd have to sale it for why would anyone not buy the stuff made in China or India?
The only reason I can own my business now is because up til last year it was fairly 'Outsource' proof. The petro man tried to put me out of business, but I pass it on to my customers, who pass it on to their customers. Same with the Insuranceman and the taxman. But now they are running pilot programs allowing Mexican Trucking firms free run of our hiways. I'd like to stick my head in the sand and believe my customers will pay the higherprice for quality service, but I doubt it. They finally figured out how outsourse American transportation, and the media as always was dead silent about it.
Hopefully when they try to completely open it the safety groups will have enough data to shut it down.