WaPo: A Bane amid The Housing Boom

[Tandalayo_Scheisskopf]

PHILADELPHIA -- To walk Thayer Street in northeast Philadelphia is to count, door by door, the economic devastation afflicting a working-class neighborhood. On a single block, 18 of the 42 brick rowhouses have gone into foreclosure in the past three years.


There's Marciela Perez, who fell ill with cancer, lacked health insurance and stopped making mortgage payments. Barrel-chested Richard Hidalgo, who got divorced and could no longer make his monthly nut. And Mike O'Mara, a rawboned and crew-cut truck driver who took on too much debt, lost his job and fell behind on his mortgage.



Cynthia Boyd 42, is barely holding on to the house she bought in Philadelphia. Boyd, who had problems making her mortgage payments after she became sick and had family problems, tried unsuccessfully to file for bankruptcy. (By Barbara L. Johnston For The Washington Post)

"Mortgage companies convinced us to refinance, and each time our bill went up," O'Mara said as he surveyed his narrow street from his shaded front porch. "You fall behind and they swoop down on you."


Philadelphia, its suburbs and indeed much of Pennsylvania have experienced a foreclosure epidemic as low-income homeowners take on mortgage debt they cannot afford. In 2000, the Philadelphia sheriff auctioned 300 to 400 foreclosed properties a month; now he handles more than 1,000 a month. Allegheny County, which includes Pittsburgh, had record auctions of foreclosed homes, and officials speak of a "Depression-era" problem. The foreclosures fall particularly hard on black and Latino families.

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/29/AR2005052900972.html

It's here. They just are trying to not talk about it.

One more thing: If you think that this will mean that the rich will just snap these place up, you are sadly mistaken. The banks are gonna get creamed. The damage is gonna be deep and wide and systemic.

[Warpy]

1. They're also falling hard on working class families

here in central New Mexico. There are foreclosure stickers in a lot of windows in my neighborhood. One house has been vacant for over 6 months, the occupants having done a midnight move and simply disappeared. There are also signs and handbills put up by speculators looking for properties to buy, but I guess they're not interested in this old, inner city neighborhood.

Yes, the housing boom is set to go bust, even in this small city in flyover country. There's a tremendous amount of construction on the fringes, and 1/3 of it is being bought by speculators to stand empty and (they hope) inflate in value. When those speculators catch a hint of a drop in prices, all that housing will be dumped on the market overnight, and look out below!

The signs are there, folks. The one thing supporting the consumer economy has been real estate, just as tax cuts to the rich have supported the Dow. You can bet that the real estate bubble will be allowed to burst and most of us will be badly hurt by it, but that the rich will keep those tax cuts until the pubbies and the DLC are both long gone.

Depression, here we come.

[getmeouttahere]

2. Key word=depression....

that's what is coming if we don't reverse course and soon.

[lastliberalintexas]

3. I wouldn't be so sure about that

I doubt this downturn/bust is going to be much different from those in the past, and the wealthy always seem to pick up quite a few of these properties at dirt cheap prices once the bust hits. They or their corporations then become landlords for the newly homeless people.

The banks will certainly get hurt, too, but they'll make some money back on the resale- just not as much as they made off the poor schlubs who bought the first time.