Not surprising to readers of this blog:
Demand is escalating for multi-generational housing as buyers scale down during the deepest housing crisis since the Great Depression, according to a survey by Coldwell Banker Real Estate in Parsippany, New Jersey.
Thirty-seven percent of the company’s real estate agents polled in January said that in the past year, buyers were increasingly shopping for homes that fit more than one generation. Almost 70 percent of the agents said they expect economic conditions will drive still greater demand for this type of housing over the next year.
Remember that last summer our Lost Decade poll found that:
34% of the young workers surveyed still live with parents—theirs or a spouse’s. For those making less than $30,000 per year, 52% were still living with parents. That doesn’t just affect young people, either.
Another thing that poll found was a loss of hope among young workers. In 1999, 77% of young workers said they felt “hopeful and confident about being able to achieve economic and financial goals over next five years.” In 2009, just 55% felt that way.
This housing trend of families gathering together to buy houses that will fit multiple generations is yet another sign of a loss of optimism. People aren’t thinking that having adult children living with their parents is just temporary—they’re planning for it to continue for years to come. Do you think they’d be doing that if they thought things were going to get better any time soon?
(h/t Alison Omens)
Tags: economy, housing
Over 150,000 are in danger of losing their heat in Detroit.
State and local agencies estimate an unprecedented 150,000 metro Detroiters are at risk of having their heat shut off if they don’t receive help paying their bills. The number of people seeking state assistance so far this winter jumped 30% over last year at this time, according to the state Department of Human Services.
Officials blame the rise on metro Detroit’s miserable economy that continues to cost people their jobs. Since last winter, unemployment rose 33% — to 288,000 people — for the tri-county area, according to state employment data.
Detroit has the highest unemployment rate of any metro area in the nation. This winter, people who have never asked for help before find themselves asking, which means that there’s more need than there is funding.
The state’s largest nonprofit for energy assistance, The Heat and Warmth Fund (THAW), is experiencing the highest demand for help since it was established 25 years ago. Volunteers are scurrying to raise more money.
The Huffington Post is doing a series they call “Bearing Witness,” stories of middle class families who are barely getting by. If you have a story to tell, email Laura Bassett (LBassett@huffingtonpost.com). They recently profiled the story of the Renault family, published by Voice of America.
The Renaults are one of more than 20 homeless families currently living in Lebanon’s Timberline Campground. Timberline’s the kind of place someone with a tent or camper might spend a night; a day or two at most. The Renaults have been here since last August.
It’s a giant step down from the three-bedroom home they lost. Renault says her family’s slide into homelessness started nearly two years ago when her husband Troy lost his construction job. “[For] a little under a year,” she recalls, “we just kind of maintained living expense. But then it just got to a point where, with the economy shifting, it caused people to no longer really utilize his services.”
These are the kinds of stories we aren’t seeing told on the nightly news – or in most of the mainstream media. Many people aren’t aware of just how dire the situation is for so many working families like the Renaults, which is why it is important that they be told. There is a stereotype of what a homeless person is, a stereotype that does not apply any longer.
But beyond the physical hardships, Tammy Renault says her family is getting a crash course in what it means, socially, to be labeled homeless. “It’s being called names. It’s being ridiculed. It’s running into people that have seen you in your highest and are not even speaking to you anymore because they’re too afraid for where you are and don’t know what to say.”
Meanwhile, Colorado is facing decisions on what to do about tent cities that are springing up around the state.
The colorful tents and their colorful residents, both very visible amid the barren winter landscape, have been the focus of months of lively debate, public forums and study by lawyers. But Colorado Springs is just one of dozens of cities struggling to find a solution to unsightly and unsanitary tent cities that house thousands of homeless across the country.
In Colorado Springs, the issue emerged when the homeless complained that police and a city contractor were making sweeps through the camps and scooping up their few personal belongings. An investigation reported that one homeless man, a veteran, lost his driver’s license, Social Security card, clothing and sleeping bag in one “clean up.”
Now Boulder is contending with homeless outrage as well. Several homeless people, fed up with being dealt fat fines they can’t pay for sleeping outside, took their complaints to the City Council, urging a moratorium on ticketing the homeless for sleeping outside.
Fining people for being homeless is not any kind of a solution. That the United States has a huge and growing homeless population should be a source of profound national shame. Our leaders should be focusing on ending homelessness, and preventing more of our fragile middle class from entering the downward spiral.
Tags: homelessness, housing, unemployment
How’s this for two sides of the American real estate coin?
In Montana, rich people are moving in, and existing residents are being told that since the land they’ve lived on all their lives, or even for generations, is suddenly worth millions of dollars, they suddenly owe thousands or tens of thousands more in property tax.
“There’s no relationship between these tax bills and your ability to pay. It’s just that we’re the beginning of the food chain,” said Abell one recent afternoon, sitting in work shirt and suspenders. “They tell us, ‘You’re sitting on a couple million dollars; why don’t you sell it?’ But this is where I raised my children. It’s not for sale. It’s my home.”
What is happening in northwest Montana, along with other newly tony areas of the state like Bozeman and the Paradise Valley, has transformed the country since frontier days: New money moves in, older homes get bulldozed.
Meanwhile, Florida continues to be filled with vacant and foreclosed homes that aren’t selling even at a fraction of the prices they brought just a few years ago.
THE MESS is the product of The Story, the fable that waterfront living beyond winter’s reach exerts such a powerful pull that it justifies almost any price for housing. The Story propelled the orgy of borrowing, investing and flipping that dominated life here and in other places where January doesn’t include a snow blower.
The Story lost its magic amid the realization that speculators had simply been selling to other speculators, making the real estate market look like a Ponzi scheme. The ensuing crash was breathtaking. By the winter of 2007, median housing prices in Cape Coral and the rest of Lee County had fallen to about $215,000, down from a high of $278,000 in 2005. By October 2009, they had fallen to near $92,000.
Now, I’m sure the economics of these cases have their differences. But does it strike anyone that we’re looking at the collapse of a massive bubble in Florida, a place people were supposed to be willing to pay any amount to live, and at the inflation of another bubble in Montana? At people being priced out of their homes not because their homes are any better than they used to be, but because some really rich people decided it was worth paying a lot to live there? What happens to the people who get priced out? And what happens when the rich people move on to another vacation destination?
This is not a rational market, to say the least.
Tags: housing, real estate
That assessment from Jay Brinkmann, chief economist for the Mortgage Bankers Association (MBA), noted by Laura here on Friday, came as MBA released a new survey showing mortgage delinquencies reached a record high in the third quarter of this year.
The New York Times reported:
Nearly one in 10 homeowners with mortgages was at least one payment behind in the third quarter, the Mortgage Bankers Association said in its survey. That translates into about five million households. The delinquency figure, and a corresponding rise in the number of those losing their homes to foreclosure, was expected to be bad. Nevertheless, the figures underlined the level of stress on a large segment of the country, a situation that could snuff out the modest recovery in home prices over the last few months and impede any economic rebound.
Unless foreclosure modification efforts begin succeeding on a permanent basis — which many analysts say they think is unlikely — millions more foreclosed homes will come to market.
More ominous yet was this line further down in The Times story:
mortgage bankers expect foreclosures to peak in 2011
In its announcement of the survey, MBA’s Brinkmann said:
Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP. Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent.
The MBA and other bank lobbying groups helped take the teeth out of the Helping Families Save Their Homes Act earlier this year by defeating the so-called “cramdown” provision in the Senate which would have allowed bankruptcy judges to order mortgage restructuring for many struggling homeowners. Bank lobbyists also succeeded in weakening the legislation by making it more difficult to get lenders to agree to mortgage modifications.
So far many who qualify for such modifications just aren’t getting them.
RealtyTrac’s Housing Predictor now has upped their forecast to 10 million foreclosures by
end of 2012:
Housing Predictor forecasts that 10 million homeowners will be foreclosed through 2012 as more mortgage holders are unable to refinance their mortgages because of falling home values or give up at the prospect of holding on to their homes all together.
The increase to 10 million foreclosures represents 2.4 million more homeowners from the 7.6 million forecast in March. These homeowners will have the dream of home ownership taken away. Until lawmakers take more severe action to halt the epidemic it is clear the housing market will not stabilize and the economy will weaken further.
Watching the Center for Responsible Lending’s National Foreclosure Ticker it looks pretty certain that 2009 will set another new record for foreclosures in a year.
According to Bloomberg a housing market recovery has been delayed:
A recovery in U.S. housing will have to wait at least until next year.
The outlook for the home market dimmed this week as residential construction and mortgage applications fell and loan delinquencies reached a record.
“I don’t think the housing crisis is over,” Mark Zandi, chief economist with Moody’s Economy.com, said in a telephone interview. “I think we’re going to see another leg down.”
Reporting on the lag in mortgage fixes, the Center for Responsible Lending says:
Last spring when Congress considered taking stronger measures to stop foreclosures, loan servicers said they could handle the problem themselves—but they’re not delivering.
CRL is urging Congress to act to ensure that current foreclosure-prevention and loan-modification efforts are as effective as possible, and to lift the ban that now prohibits home loan modifications through the courts.
Meanwhile those struggling homeowners who don’t qualify for mortgage fixes now at least have an opportunity to stay in their homes through the expanded Deed for Lease program from Fannie Mae:
Some homeowners facing foreclosure will be able to remain in their property as renters under a new program announced Thursday by Fannie Mae.
The Deed for Lease Program allows qualified homeowners to sign a lease allowing them to remain in their homes in return for agreeing to transfer ownership of the property to the lender. Rent is capped at 31 percent of the homeowner’s gross monthly income.
Leases are signed for 12 months, with the option of renewing on a month-to-month basis afterward. Freddie Mac initiated a similar program in January that allows former homeowners to stay in their homes on a month-to-month basis.
The program is based on the Right-to-Rent proposal(pdf) offered by economist Dean Baker.
Applauding Fannie Mae’s new program as “an important step forward in dealing with the housing crisis”, Baker urged it be offered for a substantially longer period, perhaps five to ten years:
This would give former homeowners real security in their homes. This longer lease period could be made contingent on timely rent payments and proper upkeep and other factors, but families should know that they have the option to remain in their home for a substantial period of time, not just a year.
Tags: foreclosures, housing, mortgage crisis
by Charity James—Minnesota
Last night while I was canvassing in an apartment complex. I knocked on the door of a 98-year-old lady. After going over the rap with her, I asked her to sign up. All she kept saying was, “this is crazy, because I pay $660 a month for rent, and we do need more affordable housing.” I stood confused for a second, then noticed that she thought I was offering affordable housing.
Again, I let her know what we were about. She then let me know that she was having a hard time hearing, but her hearing aid had been misplaced and her health care plan wouldn’t allow her to have a new one for another two months. She said that if she had better health care, she would be able to hear me better. I told her “that’s what we are out here fighting for.” She signed up and became a dues-paying member.
After about 20 minutes in her home, I was ready to go, but not before I gave her a couple of numbers for better housing.
Tags: health care, housing, membership, seniors
