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.
They want the luxury of blaming Bush, when it has been their tax and spend policies, including their 'Stimulus bill' that continue to have a negative effect on the economy.
The problem has been exacerbated with a Democrat President who is signing onto their fiscally irresponcible tax and spend policies, including their failing Stimulus Bill.
Democrats have the luxury of having a press that continues to follow their mantra of blaming President Bush, when it has been Democrats in the House of Representatives responsible for the budget.
Our neighbors are suffering because of the lack of jobs in the free market. Job opportunities directly diminished because of Government taxation and regulation.
Nothing wrong with renting. It may be the most rational choice for a lot of people.
They should have moved away from Rochester in relative good times when they had a chance to sell their house. But no, most people wait till the bad times come, then they are forced to move and get nothing for their home.
You have to look forward. It doesn’t take a genius to see that some areas of the country have been growing and some shrinking for the last 20 years.
You don’t want to be the last one out when they turn off the lights, you need to be one of the first ones out when you notice the party is starting to wind down.
The wind down in states like NY started at least 20 years ago.
We’re renting a 5 bedroom house for $1600 a month plus utilities that total an average of $500 a month. We’re empty nesters.
We are having a garage sale this weekend.
End of the month we are moving to a $1000 a month condo with $35 a month utilities. It is fiscally irresponsible to continue to live in this house, especially since we just bought that 13 acres with a new house in Kentucky as our “Galt’s Gulch”.
We are having a HUGE moving sale this weekend. We’ve also sold a ton of stuff on Craigslist.
We were homeowners for over 20 years and rented for 12. I liked renting better, except for the inability to do things like custom install our video projector. The biggest problem with the move is that my two bands used my garage as a recording studio and practice space. It still doesn’t justify the extra $1,000 after tax dollars per month.
Oh, and my new place is literally across the street from th corporate headquarters where I work.
The home we have been renting the last several years would have cost around $3,500 a month to own. That’s crazy.
I am trying to figure out how someone can have their home for 24 years and not have it all but paid off.
Unless they foolishly pulled the equity out.
Well, the problem is that most people believe they *need* to buy a home and then start making bad economic decisions. If they would start off in an apt from the beginning they would have the money to buy a home.
Liberals find so much to complain about. The glass is always half empty.
In many cities it makes sense to rent. It can cost half of what it would to buy.
Becoming more like EUROPE every day. Home ownership is a rarity there.
Judy Heller and her husband spent 24 years in their Rochester home, raising their kids. But they’re moving out soon.
Yes, you should live within your means. My point would be renting should be by choice for most, not by lack of job opportunity brought on by wrong way Democrat legislation
Well meaning friends and family spread the myth that home ownership is a good investment. It may be, it may not.
I heard this argument a hundred times:
Why send your rent down a rat hole when you can put your money into equity in a house.
Course 99% of people borrow the money to buy the house and send rent on that money down a different rat hole.
That said, I own a house now. Having kids changes many of life’s equasion.
Agreed.
“Economy is Having an Impact on Renters[Homeowners Turning Into Renters, Thanks Democrats!]”
All is going to plan per Obama. Eventually, if unchecked, the government will be the only landlord and we’ll all be renters.
In my city they are still putting moochers in mortgages and house purchases they can’t afford.
It feels like there is a big rush to get the moocher class in houses before public outrage shuts down the handouts.
Meanwhile, working class people around here are still losing their homes every day.
I lived in apartments when I was younger, in my experience it sucked.
Now my wife and I and the tax assessor own this home I live in.
My wife and I paid off a 15 year mortgage in a little over 8 years and as I noted before, we and the tax assessor now own it.
Too late... we already are. Try not paying your property taxes and see what happens....
I hate articles that leave the reader wondering. Hopefully they got something positive like helping their kids pay for schooling,,
There are also good deals on rent-to-own, or lease-purchase deals. If you opt to stay, you eventually don’t have to pay rent. If you opt to leave, you’ve spent no more than you would have on any other rental.
>>Why send your rent down a rat hole when you can put your money into equity in a house.
Course 99% of people borrow the money to buy the house and send rent on that money down a different rat hole.<<
The counter argument is that in the long run, owning a home is the best investment you can make. Real estate has appreciated over time and even in “bad” areas eventually recovers and increases.
At the height of the insanity, my home was worth 5 times what I paid for it. Now that things are “depressed” it is worth “only” 3-1/2 times what I paid for it and prices are starting to go up again. Since I have never pulled any equity house, that is pure gravy. I will probably sell and move, but I will have enough to pay cash for a new home (in a cheaper area) and still put a ton into the bank.
Or you can stay there and get a reverse mortgage to guarantee your home and income into your dotage.
If you buy a house that is proper for your income level, and don’t use it as a financial tool, there is no better investment.
>>Hopefully they got something positive like helping their kids pay for schooling,,<<
Kids can pay for their own schooling. I did.
There is no need to BK the parents. That is irresponsible on both parents and children.
That's right, everybody rents from the government.
Around here, property taxes supports public education and public education is run by the teachers unions so...we're at the mercy of the unions.
The last property tax increase (for the children) was supposedly for repair of leaking roofs, broken AC's and etc.
Once the voters passed the increase, every cent was used for teachers union administrative raises. Even the teachers felt 'tricked'.
It is for me. I'm in the military. Fact is, society is better served with a large segment of the population mobile, untethered by mortgages and able to quickly pack up and move to where the jobs are.
I remember my Mother as a ‘young’ widow in her 70’s saying “Hallelujah” when she sold her condo and moved into an apartment after being a home owner for decades.
She didn’t realize all the little to big things my Dad did each day to keep their homes in proper living conditions. First she sold the house they lived in and bought a condo not to have yard work. After 3 years the homeowners fees were outrageous and the condo needed a lot repair that my Dad would have done.
She then rented a good two bedroom apartment for about a decade until she needed to be near some relatives. Then, she rented a nice condo with a two year lockin rate. When they tried to raise her rent, she moved into a retirement home for her final years.
Some of our younger and single relatives or young couples with no children have been able rent better places for less $’s and be closer to work or a rec area with the drops in rent prices.
Fact is, society is better served with a large segment of the population mobile, untethered by mortgages and able to quickly pack up and move to where the jobs are.
And thanks.
I'm in the military.
ditto
Renting is a hardship? sob sob
Remember the example of Maggie Thatcher selling off Council Housing (The Projects) to tenants at greatly (I mean greatly) discounted prices. It drove the lefty Labour Party insane with rage (why?), removed the cost of maintenance from the cities, and created a much more balanced political outlook in the new owners.
by: Jason Kelly September 11, 2009
TCW Group Chief Investment Officer Jeffrey Gundlach said at a June 2007 Morningstar conference, "The subprime market is a total unmitigated disaster and it's going to get worse. The delinquency rate is still climbing. At the same time, the ability of people to refinance is also going down. It's just not a very attractive situation." The S&P 500 traded at 1,500 back then.
On Wednesday, in a conference call titled Too Good to Be True, Gundlach said of the current market that it was about to lose momentum, and advised selling on strength when the S&P 500 is over 1,000.
"You've made 90% of the money you're gonna make in this rally," he said. He thinks much of the economic data that people are calling green shoots is just the temporary result of unsustainable government spending. "We're basically borrowing money and calling it economic growth. It's not real economic activity."
[snip]
Ditto.
There are a lot of reasons to go from owning to renting. Our house mortgage wasn’t beyond our means, but (i) my husband lost his job; (ii) his mother lives with us and the distance from the house to all her activities was becoming a real issue; and finally (iii) the company I work for closed its doors.
The saving grace was that my clients all signed contracts with me and my husband and I have started our own business. We needed to be closer to the city for both the fledgling business and for my mother-in-law. We exited our mortage legally and with some grace (but not without monetary loss) and are renting a place in the city that meets all of our needs for considerably less than the mortgage payment. Because we were no longer “employed” we couldn’t renegotiate the mortgage to take advantage of the much lower interest rates.
I don’t like living in the city, but I don’t see it as forever and you do what you need to do.
When we originally bought the house, the sellers had to bring money to the closing. They had taken all the equity out of the house to send their children to college and to buy a condo that fit their empty nest lifestyle.
This is the plan. The government is getting back in the public housing business anyway.
We can all live in shoebox Soviet style apartment buildings while the political and moneyed elite live high on the hog.
“We’re basically borrowing money and calling it economic growth. It’s not real economic activity.”
^
Nailed it! (Now I’ve got a belly-ache...)
Yes, I was talking it over with finance guy, and came to a question of;
Will inflation increase the amount of my stock holdings in IRA over the loss of companies that go out of business if Democrats remain in the Majority next Congressional election?
I sold my house and moved to renting because of coming inflation. Better for your rent to be cheap than your house be cheap.
They don't mention how many re-finances and/or equity lines of credit. That's the problem.
Yes, well there are many factors here including people who purchased homes who never should have along with people who have been overwhelmed with bad luck and don’t have the support structure to see them through. The rule of thumb used to be as long as you were only staying in an area for three (five, six?) years, renting was the wiser option.
Chances are they mortgaged it to the hilt and used the money to buy extras. Then instead of concentrating on paying the house off first, they bought the new car, new boat, new wardrobe, vacation in Bahamas, etc. Plus stuff for the kids too.
They didn’t think ahead.
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.
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