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A House Is Not a Home
Home ownership is a significant part of the American Dream. Most of us covet a place of our own, a safe harbor where we can go. Given the state of the economy and the Obama administration’s efforts, what’s up with the home front?
A Simon & Haggerty article in the 
May 6th Wall Street Journal says the current downturn in home prices has left a fifth of U.S. homeowners owing more on a mortgage than their homes are worth, dubbing homeowners in that unenviable situation “underwater borrowers”. The Zillow.com website quantifies the number of borrowers who owe more on their mortgages than their homes are worth at 20.4 million for the first quarter of 2009, a significant increase from the 16.3 million at the end of the fourth quarter last year. Zillow’s figure means that 21.9% of US homeowners have no equity in their homes and are paying off mortgages that were issued when their homes were worth significantly more.
Stan Humphries, a spokesperson for Zillow, explained the situation this way: "What's going on here is that you don't have any markets that have turned around and you have new markets, like Dallas, that have joined the ranks.” Some home economists believe that a borrower who owes 30% more on a house than it is worth is more likely to walk away from the property than one who owes less than 10% more. Falling prices also make it more difficult for homeowners who are in financial trouble to take advantage of lower refinancing rates or to sell their homes. Under Obama’s plan to stabilize the housing market five million homeowners who have loans guaranteed by government-controlled Fannie & Freddie can refinance, but only if their mortgage is no more than 105% of the home’s values.
According to the media, falling prices make homes more affordable for first-time home buyers and people who have thus far been shut out of the housing market. I’m not so likely to accept the media’s opinion as sage advice during a faltering economy, especially since I don’t accept its opinion on anything else these days. If you see people losing their jobs all around you, do you take a plunge into home ownership? If your 401K is not what it used to be, do you use it for a down payment? If you expect property taxes and energy prices to increase, do you just batten down the hatches until the storm passes? I imagine the answers to these questions would be different for each of us.
Each of us brings our own unique perspective to any given situation and each of us has a different tolerance for discomfort, so it is difficult to give an overarching answer to any of those questions which would apply to most of us. However, I'll take a stab at answering another important question:
Question: When is a house not a home? Answer: When it becomes an insurmountable burden.
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http://online.wsj.com/article/SB124156804522089735.html
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I always wished I owned a home, even if it was the size of a shoebox, it would be my shoebox. That was never to be, though. I really feel for all those people who are having difficult times trying to hold onto their homes or who have lost their home entirely. I can't imagine what it must be like to just have to walk away from your home, because you can't afford it anymore. For all those still in their homes, the constant stress from worrying about money and how they will be able to continue to afford to pay the mortgage, the property taxes, the utilities, repairs, etc. has got to be causing their marriages to suffer, their health to suffer and their relationships with their children and other family members to suffer.
During the 1970s, inflation started to soar and it looked like the dream of owning a home was soaring away with it. Home prices were rising and the affordability gap grew wider. We were both working but our combined incomes weren't enough. If we had kept going the way we were, we'd have been stuck in an efficiency apartment. Something drastic had to happen so I quit my job and formed a construction company. We found a dilapidated rowhouse on Capitol Hill 8 blocks from the US Capitol and we bought it cheap. It had a $10,000 balloon mortgage what was due in full in one year. Talk about a risky move. I didn't know a thing about building but had a drafting class in 8th grade. Why did I think I could tackle something like renovating a 3-story 1908 rowhouse? It was my confidence in my ability to learn in real time. If I see something once, I can do it as if I had always done it. I'm sort of an idiot savant that way. Failing grades in school but I could turn lead into gold with a nuclear particle accelerator.
I renovated that house, sold it myself for a big profit, and was able to buy another home that was in the worst shape in the neighborhood. The bank withheld funds and gave me 4 months in which to make it habitable and I barely made it.
Wow, Ron, that is some story. You took a mighty big chance, but in the end, it paid-off. Kudos for that. I don't like that term idiot savant, so don't call yourself that. Everyone has some sort of talent or something that is special about them. Some people just don't do well with formal classroom situations or tests, but it has no bearing on their true intellect. You've been very successful in life, and nobody that is, shall I say, intellectually challanged could have accomplished what you have. I admire your spunk, tenacity and the belief you have in yourself. I was always a smart kid but never believed in myself, which has always been to my detriment. If you haven't got belief in yourself and courage, then even being a genius won't help you much.
Sometimes all we need is a feather and someone to tell us we can do something. I needed a dining room table but couldn't afford to buy one. A friend of mine said I could make one but I didn't believe her. She insisted I could do it so I thought I'd try it. There was a lumberyard nearby that had some hardwoods. There was a vertical stack of rough-sawn maple with the bark still on. After selecting a bunch of slabs, I asked that they be milled to my specs that I figured out on the spot. I ended up with a beautiful solid maple trestle-style table that could be pulled apart to accept a leaf that can be stored under the top. It's 27 years old now and looks brand new.
I'm afraid I never had anyone telling me I could do anything. Quite the opposite, really. Most of the people around me growing-up and on into my adult life treated me like I wasn't too bright. Maybe people equate shyness and introvertedness with low IQ. I have never understood it, but it is what it is.
Do you have a picture of the table you made? I would love to see it, if you do. Things you make with your own hands always mean more than things you buy.
Growing up, how many of us heard "You can't do that--you're a girl"?
Worse, how many of us believed it?
I'll echo your request for a picture of Ron's table. That would be a good thing to see.
GONE FISHING
Oh no, creeper. I'm sorry....it wasn't my intention to make anyone sad.
It just brought back some unpleasant memories.
The funny thing is, there were people in my life when I was a child who told me I could do anything. Too often those same people were the ones saying the next day, "You can't do that. You're a girl."
No wonder I'm schizophrenic.
GONE FISHING
Sorry for the unpleasant memories. Honestly, creeper, I don't think there is much in this world that you couldn't do once you put your mind to it.
Yoda: Do or do not. There is no try.
Ron: If this doesn't work, what does?
When I was young, I was told I'd be nothing but a ditch digger or a beach comber. I'd like to opt for the latter. Basically, I had no future since I was supposed to be a failure in life. I, too, was considered dumb by my teachers and my peers. Naturally, this introverted kid with failing grades and poor eyesight had very low self-esteem. Fortunately, I didn't know what that meant and simply tried to do what I could.
Here are some shots of my table made from solid maple in 1982. Since it was covered with stuff from our torn up kitchen, I could only photograph bits and pieces.
A corner. The front is at the lower left.
Under the front.
View of the trestle base showing the unfinished leaf stored under the top.
The rounded trestle feet.
There's nothing to equal the satisfaction of making something yourself. Even better when your result is better than anything they're purveying in the stores.
GONE FISHING
As you can probably tell, I like rounded corners. Must have been born that way, if this little anecdote is any indication. When I was 1, my mom dropped me off at my aunt's apartment. Since she had no children yet, there were no toys for me to play with. I was locked in the bedroom to keep me safe and out of mischief. What could I possibly to there?
My aunt is very fond of very sharp corners, so much so that she had corners that were less than 90°. She had just gotten a new bedroom set with a dresser with very sharp corners that offended my sensibilities. There was a nail file on the nightstand so I went to town sanding off the entire top edge of the dresser.
When my mom got back, I was retrieved from the bedroom. My aunt spotted my handiwork and went ballistic. You can imagine the screaming and shouting that ensued.
my heart goes out to your mother.
<fond smile>
GONE FISHING
I was quite a terror at times. My mom tells me she had to go out into the blizzard of 1947 in NYC to get me banana baby food because it was the only thing I'd eat at the time.
Now that table is great craftsmanship, Ron. You should be mighty proud of that.
Good Story BJ..Interesting data...Thanks...
Ron...Nice table..Good Pics...
Kim .Hi..
Everyone...Hope U R> Good...getting niceer weather here now..Lots of Graden work and home Improvements going on with our NW Nest...
Love it..!!
Suday was Great...80 degrees...went out on our kids new 24 foot power boat...Daughter and son in Laws...they put in in the marina downtown...Great 2 hour ride...saw Sea Lions on a float..and two eagles also....in One Harbor...could see across to Seattle and downtown with the space needle...and Cascade mountains behind it...
Down town Seattle Water Front is a great Day Trip from here...either by fwerry or Private Boat...Lots of Shops and ..museums..Markets and eaterys all along the Board walk...Famous IVARS Seafood...and a trolly runs the whole length...The Major seattle sores are Five Blocks uptown from there...
well..Im Smoking more salmon today...so got Choeres to do...best to you all..
LION
Hey there Mountain Lion! Glad to hear the weather is nice there. How lucky you are to get to see real live Sea Lions! Seattle sounds like a fabulous city.
Didn't know you live in the NW (beautiful area and great place to live). People in your area went for Obama in a big way. Are they happy with their choice? Also, how is the housing market there?
Have you been out here to the NW...yet BJ...?? I grew up here..and Love it..
Yes..this was a big Obama State...(Washington) Our govenor Christine Gregorior (sp) supported obama..but my Congressman Norm dicks supported Hillary...as I did as a delegate...Have not heard much comment yet by People...but the Newspapers..Editorials, Political cartoons and letters to the editor run pretty much negative toward Obamas big Spending..as we suffer here state wide with Big Budget cuts...layoffs ..and no real sight of stimilus Help...
Over all the housing market has held up Fairly well..with about 10-25% pull backs in housing costs or Value..You can still get a Very nice Home in the high 100s ..to 200s...and many High end Exclusive Homes depending on what you can afford..
Our economy is good here whereI live because there are so many Military bases here..and a Shipyard..which supports other business's too..
Over all..I hve deep concerns about Obamas Policys...and the Economy..and job Loss's..when you read Matt's head lines every day...Its not a Pretty picture..
Lion
Hey Mountain Lion, when are you going to tell us another story from your days as a detective?
your answer is pretty much what I expected. I knew people there were hungry for a change and that Obama operatives pretty much trashed Hillary during the campaign. I am not surprised that they are now put off by the lack of any real tangible evidence that his policies will work in their favor.
Good to hear that your specific locale is ok. (A government entity nearby pretty much guarantees that you and yours will be able to ride this recession to better times. I''m glad.
)
thanks for supporting Hillary. I will always believe that she was the better candidate, just as I will always believe the same about Gore in 2000.
through to the real problem, in this case the suffering that has to be taking place. You wrote: "has got to be causing their marriages to suffer, their health to suffer, and their relationships with their children and other family members to suffer." How true.
The song goes "you have to know when to hold them, know when to fold them". It is easier to sing about it than to do it. During this housing crisis, people have to weigh the financial loss against the rest of the burden. (It is hard to turn your back on the American Dream.)
We need to keep these people in our prayers,
I'm not very knowledgeable about this. I've never had a mortgage and don't really understand how it all works. I wish I did. I do understand how people react to stress and worry, though. One of my favorite quotes is by President Roosevelt..."When you come to the end of your rope, tie a knot and hang on."
There are an awful lot of people out there who are hanging on to the knots in their rope with all their might. I gather that many are trying to stay in a house that is putting them into financial ruin, much longer than they should. I can understand that. It has got to be excrutiatingly difficult to give-up a home you've worked and sacrificed to have.
I don't usually read the WSJ. These are scary numbers. I can't fathom the Pollyannas who are saying a better economy is right around the corner and we've bottomed out. Must be those guys are narrowly focused on their own retirement plans and high-level jobs. Maybe they are ok. More ordinary folks are still in free fall.
Independently adrift
"the Pollyannas who are saying a better economy is right around the corner and we've bottomed out" are delusional or on the Obama payroll.
Despite all the stimulus money, most of which won't be spent until 2011, it'll take a few years, at least, for any substantive recovery to occur. We may not have seen the bottom yet in the stock market or the economy.
From what I've read the crash of '29 was followed by a series of economic upturns and downturns. Roosevelt's relief efforts were important, because they helped people survive. However, they didn't turn around the economy; it was the war that did that by creating jobs and a new workforce.
when I wish we had a "rec" button. I'd rec both of you, liz and BJ, for those comments.
GONE FISHING
Heh, went to the NYT to look up some date and the front page has a cool new Apple ad that uses a fun technique. Check it out: NYT front page.
What I was after was this interesting interactive map:
Mapping Foreclosures in the New York Region
You can even see the foreclosures over time since 2005. What's happening is horrific and stunning.
it is a problem, so they are mapping them. I do not understand why we don't hear more about the people who are in trouble and who need help. If so many people are losing their homes; they are in serious financial straits.
Our house is paid for, thank dog. But it has a tax load on it that's staggering. A couple of weeks ago we appealed our assessment. We paid an independent appriaser to come out and give us a new appraisal. He came in at sixty thousand less than the county was figuring. We sent that appraisal off with our appeal. A week later the county appraiser came out, went through the house and added forty thousand back on.
I have come to the conclusion that our government has declared all-out war on homeowners. And I don't expect it to get better. I believe that in the not-too-distant future home ownership will be reserved exclusively for the rich. When you stop to think about it, the largest chunk of assets now left in the hands of average Americansas is their homes. Our overlords see that pool of assets and they want it. Part of the process of transferring all wealth into the hands of a few will be the elimination of home ownership as we know it now.
GONE FISHING
to have homeowners so tax poor they can never do anything more than own a house.
I blame all those who voted for the hope and change that Obama promised, they gave the keys of the Whitehouse to a slick Chicago politician who has an agenda that will destroy the middle class if he is allowed a second term. I hope they wake up.
what I found. It seems Zillow.com also did a survey of homeowners. The results of the survey make it clear that many people did actually wake up, according to Humphries, Zillow's VP of Data & Analytics.
Humphries is quoted in a Reuter's article at: http://www.comcast.net/articles/finance/20081008/BUSINESS-US-USA-ECONOMY-HOUSING saying: "The perception of American homeowners is finally catching up to reality, which is that 80 percent of all homes in the country lost value during this past year."
Eighty per cent of all US homes lost value. Have you heard our media discussing this? (I haven't.) Good grief, what is wrong with our journalists? EIGHTY PER CENT! I am beyond shocked.
The property values around me went up slightly this year so the property taxes are a little higher. Those taxes doubled in the past few years so I'm just happy the growth rate has slowed. Still, it'd be horrible to have a mortgage for a loan that's higher than what the house is currently worth.
Soak the Rich, Lose the Rich
Americans know how to use the moving van to escape high taxes.
which we purchased 11 years ago after a fire burned our previous home is on a roller coaster in value.
It wasn't considered worth very much, although a lot more than the insurance paid out on our previous home, because it was one a busy street and because it needed a lot of work. It was structurally sound 1914 brick craftsman style bungalow and we fell in love.
Most of the "work" has been done and much of that was simply cosmetic. (First to go were the "plastic" tiles in shades of pink and burgundy that "modernized" the bathroom back in the 1950's.) fortunately we are both handy types so we've done all the work ourselves except for the electrical update which was a safety issue.
The kitchen still needs a major overhaul but it's functional, if not beautiful and we're 11 years older, one of us is now on SS so the remodeling has slowed to a crawl.
Our house had gotten a modest increase in value over the years until a couple of years ago when suddenly the "value" more than doubled. How can this be we asked ourselves? We do not have, nor want stainless steel appliances or granite counter tops.
Still the assessed price went waaaay up. Taxes, of course went way up. Then the value of the house came back down to reality and the taxes stayed right up where they were. Am I surprised?
Still it's my house and I love the battered old beauty and intend to stay here until they carry me out feet first. I cannot imagine the pain of losing it. It's my nest and I'm a nester. Having been an army brat and never stayed in one place for more than a year at a time, if that long, I planted my roots deep and firm when I got the chance.
And by the way Ron, that is an exquisite table. You done yourself proud!
A Dishonest/Biased Media Is A Crime Against Democracy!
We refer to our home as our nest, too, and we're nesters. We have black appliances in the kitchen and almond formica countertops from 1979. I'm not a big fan of granite, though there are some beautiful types. We're planning a new kitchen as part of a big addition project but I'm not sure what we'll use. I really like Corian for it's warmth and durability. A new, modern kitchen and new bathroom are the best ways to increase a home's value and someday, the housing market will come back. Right now, though, I'm not concerned about resale value. We just want to make our home be what we want it to be.
of a house goes down, the property tax would follow, but it isn't the case. As you pointed out, Kenosha, and as Creeper said earlier, the property taxes are staying at the pre-recession level. Doesn't make sense, does it? Unless you realize that most local and national politicians are not in their positions to serve the people who elect them but rather to serve themselves and the lobbyists who back them.
I'm a nester, too. I guess that instinct is at the core of why I feel such empathy for people who are losing their homes. I know some may have bought homes that were too expensive for them to maintain, but there was a time when banks would never have allowed you to get a mortgage if that was the case. I also think that there are people who are in danger of losing their homes, because they have lost their jobs and can't find another one in this economy.
The whole scenerio stinks, just like the politicians and financial geniuses who are behind this mess and made it happen. It was their responsibility to make the system work and to have effective checks in place to safeguard our economy. We need to clean out both houses of the Federal Government and a good way to start is by limiting the number of terms for both Senators and Representatives.
We need new players.
Next year is our chance to make some changes. My congressman wanted to bring Gitmo detainees to Old Town Alexandria, ferchrissakes. Throw the bums out!
The sooner that happens, the better.
There was a story in the Chicago Tribune last week about a married man with children, who lost his $100,000 a year position. He and his wife could not believe how fast their lives changed. They said they went from middle class to poor in the matter of a few months.The father was packing for his new job in Arkansas, and the family was getting ready to follow him if the job worked out and they could get rid of the house.
The Congress is so insulated from the public; I don't really believe they understand how badly some people are doing. In truth, I don't think some of them really care.
For example, the government has a stupid new plan for underwater borrowers according to the website Housing Doom: housingdoom.com/2008/05/10/fannie-keeping-borrowers-underwater/
The article includes this:
Underwater borrowers would still be underwater, but won’t be "trapped"? It looks more like a plan to keep borrowers chained to an excessive mortgage than a way to "liberate" them....