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Job Loss Could Put One in Three Out of Their House
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2011 Oct 7, 1:56am 15,049 views 46 comments
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The flip side of that is the native middle class former homeowner (seller ) now has the $1M in cash because he sold at peak inflated prices, to the rich (now former rich) foreign buyer.
Who is the dominant upper-class now ? Someone is $1M poorer.
Yes, this is a very good point. Some people like to say, "the people living in [area] are much richer than the people who used to live there." And I like to say, absolutely not -- the people who live there now just gave a huge windfall by buying a house for an inflated price, and the prior owner is now the rich one.
bmwman91
2011 Oct 12, 10:45am
The flip side of that is the native middle class former homeowner (seller ) now has the $1M in cash because he sold at peak inflated prices, to the rich (now former rich) foreign buyer.
Who is the dominant upper-class now ? Someone is $1M poorer.
Sure. Still, prices in the "nice" areas are still largely inflated, and the native with $1M in cash from a sale will have to spend most of it to get into comparable house in a comparable area, or use it as a down payment and borrow even more to "upgrade." They have even less if they still owed the bank for the original purchase.
the native with $1M in cash from a sale will have to spend most of it to get into comparable house in a comparable area
Not necessarily. A condo in Florida goes for much cheaper, with no state tax and better homestead and pension protection. Win-win! Or maybe a ranch in Montana. The possibilities are endless.
The people who sold their houses at inflated prices have real hard money. A lot of other people have debt, not wealth.
Not necessarily. A condo in Florida goes for much cheaper, with no state tax and better homestead and pension protection. Win-win! Or maybe a ranch in Montana. The possibilities are endless.
Oddly enough Billionaires Tomas Siebel and Ted Turner live in Montana.
TechGromit
2011 Oct 13, 1:01am
> Job Loss Could Put One in Three Out of Their House
A little misleading title. This would imply that 2 out of 3 people have the financial resources to survive indefinitely without income from a job.
This reminds me of the movie "The company men". People who appear to be quite wealthy often have a lot of debt and no plan for what to do when the big paycheck stops rolling in.
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"Ten percent of survey respondents earning $100K or more a year say they would immediately miss a payment.
The survey was conducted on behalf of a financial consortium comprised of the Certified Financial Planner Board of Standards, Financial Planning Association, Foundation for Financial Planning, and the U.S. Conference of Mayors.
Sixty-one percent of those surveyed said if they were handed a pink slip, they would not be able to continue to make their mortgage or rent payment longer than five months.
Job loss has become the primary driver of mortgage defaults. With the national unemployment rate holding above 9 percent for five straight months and not expected to drop by any significant measure in the foreseeable future, the state of the labor market is one of the biggest obstacles for struggling homeowners and their lenders.
A number of programs at both the national and state level have been launched to assist unemployed homeowners, but so far the expected results haven’t materialized."
http://www.dsnews.com/articles/job-loss-could-put-one-in-three-homeowners-out-of-their-home-2011-09-30
If this unlikely scenario came true, it could lead to further declines in prices. But it seems more like sensationalist journalism with a cautionary bend.
#housing