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View Diary: Housing Crisis, Potential Recession Loom Large in Battleground States (174 comments)

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  •  The apartment taboo (5+ / 0-)
    Recommended by:
    OLinda, PaulVA, vox humana, dconrad, wmacdona66

    Living in an apartment is not all that bad. There's no lawn to mow, no gutters to clean out and usually no snowshoveling to do. I say this as someone who lost a home and became a renter, and I've never sailed or skied so much in my life.

    A lot of Americans will soon get used to living in someone else's property, and it is no big deal. Renters have a LOT of rights against homeowners. Remember, it is always possible to get a roof, whether you own it or not.

    •  I don't argue with the idea that rentals ARE (3+ / 0-)

      available and can be a viable option. I am questioning whether there is enough rental housing stock available for this huge influx of renters coming into the market. I am questioning two steps ahead, I guess.

      I see rental prices rising with this demand... and that seems to spell crisis to me.

      The law is slacked and judgment doth never go forth: the wicked compass about the righteous and wrong judgment proceedeth - Habakkuk 1:4

      by vox humana on Tue Nov 27, 2007 at 09:31:32 AM PST

      [ Parent ]

      •  The houses they leave won't be vacant (4+ / 0-)
        Recommended by:
        opinionated, vox humana, wa ma, dconrad

        and many will likely become rentals when investors buy them, thus eliminating your lack of rentals problem.

        •  Only if (3+ / 0-)
          Recommended by:
          opinionated, Leap Year, dconrad

          investors are able to buy them at lower than foreclosure price. Otherwise, won't the rent be as unaffordable as the mortgage payment was?

          I see in posts elsewhere that (as yet) banks are unwilling to sell at a loss to move the property. Until they change that policy, this solution of selling to investors would not help.

          The law is slacked and judgment doth never go forth: the wicked compass about the righteous and wrong judgment proceedeth - Habakkuk 1:4

          by vox humana on Tue Nov 27, 2007 at 09:48:26 AM PST

          [ Parent ]

          •  This is going to take time to work out (3+ / 0-)
            Recommended by:
            opinionated, vox humana, wa ma

            The banks will eventually have to be forced to accept the losses, one way or another. Meanwhile, I suspect they will keep stretching the process out as long as possible.  One problem is that if they begin discounting properties the other properties tied to mortgages which they own will also be reduced in value, leading to a cascade down of more foreclosures (since every additional drop in value leads to more owners underwater/unable to refinance without cash, etc.)

            This will happen eventually, when they are compelled by regulators or insolvancy to face the music.

          •  They'll take what the market will bear. (2+ / 0-)
            Recommended by:
            vox humana, wa ma

            If the new renters in the area don't have money to rent at the demanded price, the new bank-owners will have to lower the price until they can find a renter to pay it.

            Either that or keep the properties sitting vacant like millstones around their necks, making no earnings at all while still generating property taxes and upkeep costs. Half the cash flow is a wiser business choice than none.

            The invisible hand of the market at work. It doesn't always operate to choke the poor.

            "...And I woulda got away with it, if it hadn't been for that meddling Kos!" ---attributed to Tom DeLay

            by AdmiralNaismith on Tue Nov 27, 2007 at 10:29:36 AM PST

            [ Parent ]

          •  Easy, just chop it up (1+ / 0-)
            Recommended by:
            vox humana

            Turn that 2000-square-foot McMansion into four 500 sq. ft. apartments and rent them each out for $500 to people who can no longer afford to live in McMansions.

            Priez mes frères
            Condamner la guerre
            Qui brûle aux quatre coins de la terre

            by dconrad on Tue Nov 27, 2007 at 05:30:37 PM PST

            [ Parent ]

        •  call me prideful (0+ / 0-)

          and god I hope I'm never in that situation, but I would find another option to staying in my foreclosed home and paying someone else rent for it.

          •  But you wouldn't be (0+ / 0-)

            You'd have had to move out and find some other place to rent, and then by the time the investor had converted it to a rental property, they'd find some other loser renter to rent it to.


            Priez mes frères
            Condamner la guerre
            Qui brûle aux quatre coins de la terre

            by dconrad on Tue Nov 27, 2007 at 05:29:00 PM PST

            [ Parent ]

        •  I wonder about this (0+ / 0-)

          In my area, occupancy rates for rentals are always very, very high - there's not a lot of wiggle room. You can typically find a 1- or 2-bedroom place in an apartment complex that will rent for less than a mortgage would be. But we're talking about empty HOUSES, often of the McMansion type. Rental houses around here (of say, larger than 900 sf) have never been a good deal. They've typically been geared towards e.g. short-term 'executive' rentals, and not to families. I just don't see rents on foreclosed suburban and exurban homes becoming affordable. I guess people could cram 2 or 3 families into one McMansion and save money that way. The smaller rental homes are often places that have been kept in a family for a long while, and the mortgage is paid off, so the rental just represents a steady, extra income for the owner. I'm not sure how larger, newer houses that are not paid off can become a real source of affordable rentals.

      •  No argument here (2+ / 0-)
        Recommended by:
        vox humana, dconrad

        My point is primarily about "renter's shame". It shouldn't exist. For a lot of reasons, renting is an absolutely fine way to live.

        In the reality of supply and demand, more people looking for a rental home means rents will rise. Right now there is a premium on ownership, and it has partially to do with the "American Dream" or "Keeping up with the Joneses" mythology (the other side of the "renter's shame" coin).

        That premium means monthly mortgage payments are much higher than rent payments for similar spaces. The premium includes interest, taxes, and incremental principal gains, where rents only define the cost of having a roof.

        When rents rise to meet them, we'll see the "American Dream" machine sputter back to life.

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