Last year we sold our son's house in Canal Winchester, Ohio. We noticed then the demand for housing, and I became aware of the large real estate groups (to whom we didn't sell, at least I don't think we did). Then later I became aware of the vast amounts of wealth that was made during and because of the pandemic. Is private property coming to and end?
https://youtu.be/-CESSiPk6qs Video on real estate values, super wealth, "reset," and global economy by "Man in America."My uncle Gramps was the husband of my dad’s sister, Marion, who owned the Tot and Teen shop in Mt. Morris. Nice guy, but I didn’t spend a lot of time with him. My fondest memory of him was winter 1963 or 1964, when he helped me with my taxes. I think I’d brought all the records home (to my parents) for Dad to help. Gramps came over and showed me how, with our duplex rental property, we would owe no taxes on the income. I found it stunning then, and even now, that by listing all our expenses and claiming something new to my vocabulary, depreciation, we owed nothing. The tax laws are made for the rich by the rich, but occasionally the little guy gets a boost.
President Trump, whom the New York Times is trying to smear without the word illegal appearing anywhere in the story, created jobs, he provided services, and he took advantage of all the “loopholes.” So did Jeff Bezos, the richest man on the planet, who owes no income taxes at all, and who coincidentally owns the Washington Post, also a Trump hater.
I once asked my mother why my uncle was called Gramps, since at that time he may have been 40 something and had no grandchildren, and she said she didn’t know but that was his nickname at Mt. Morris College where my parents and he met (my aunt would have been in high school so I assume they met later).
I hated being a landlord. We met some really nice tenants and with some we have stayed friends. But it only takes one or two bad ones to make you resolve to never do it again. But that duplex, purchased in 1962, for $14,000, put us on a financial footing that blesses us to this day. We took a mortgage for $10,000 and Dad held the second mortgage. The rent, as I recall was $70/month and that covered the mortgage and the utilities—so we essentially were living rent free. We sold it on land contract in 1967 when we moved to Columbus, and that payment covered our car loan and the mortgage. When the new owner paid off the loan a few years later, someone at the bank discovered an error in our favor, and as I recall we had a nice settlement.
Owning and living in your own home does nothing for your own wealth, but owning real estate and renting it or using it for some other investment does. My father always said the cost of your home always had to include what the down payment and improvements could have earned doing something else.
When things get too crazy I just browse through the rental and sale prices for real estate on Marketplace. It's a super time waster, and mind relaxer since I'm not in the market to rent or buy.
Just looked at a nice little ca. 1920 2 story with 2 baths with 1038 sf for $875/month.. Yard is small, but dogs OK. Backyard storage unit. Don't see a garage, but there's a drive-way slab behind it. That's good for our weather. I see an AC unit outside that looks new. Wiring updated based on the conduit I see. Wonderful front porch, a bit of a climb from the sidewalk, but the steps look like new concrete. My guess is people enter from the ally in the back rather than park on the street. Has a back porch with extra security enclosure. I think I can see security lighting in the back which has a privacy fence.
First floor looks like hardwood floors, bedrooms carpeted. We used to own a house built in this era, and closets are always small. The photo doesn't show a lot of the kitchen, but the black appliances all match, so it's not copper tone or pink. Arched doorways on first floor. The neighborhood doesn't look the best based on school district--it's a clue when they don't list the high school district, but Columbus has some great private and Catholic schools. The owner has put some thought and effort into keeping it up--or maybe it's a recent flip. You'd need a car because the public transportation isn't the best (it rarely is in Columbus).
Oh, and there's a basement, but if you've ever lived in a home built in the early 20th c., you probably won't use it for anything except storage, although when I was a kid, they were great to play in. My brother and I used to roller skate in the basement of the home we had in Forreston.
I just read yet another article in Columbus Business First “Stop being scared of people who need affordable housing” on the need for low income housing in Columbus—this time to satisfy the need for workers by Columbus businesses and those businesses which might relocate here if there was a solid pool of workers. AFFORDABLE in government housing speak means money has been transferred from tax-payer abc to entitlement receiver xyz, but many in that chain are not poor--they are staffers in government backed programs and agencies (like HUD, USDA, HDAP, OHFA COHHIO) earning good salaries, with excellent benefits and job security, which is why the programs must be continuously expanded. I looked through the list of agencies, non-profits and city employees who attended the meeting. Then I looked back through my blog to 2008, when I’d written on this topic. Ten years ago the plea was that good housing transforms lives. And I said:
“Housing doesn’t change lives. Marriage does. Parenthood does. Faith in God does. Employment does. Education can. Art and music can. Pets might. Leisure activities don't. Substance abuse will definitely change your life downward. But not housing. Ask any landlord who turned the keys over to a careless, slovenly tenant. Housing doesn’t create safe neighborhoods; it doesn’t get transportation issues funded; it doesn’t improve health; it doesn’t pass bond issues. In partnership with the private sector, this kind of housing for low income people creates jobs and profits for the construction companies.”
Our first home was a duplex, purchased for $14,000 in 1962. Our renters paid the mortgage, we borrowed from my father the down payment. Then in 1964 we bought a second house in a better neighborhood and rented both units. That paid for both houses and a car payment. If we hadn’t bought that first run-down, sweat equity duplex in a neighborhood on the way down, we wouldn’t be where we are today. But being a landlord was the pits. I wouldn’t wish it on any couple in their early 20s.
My parents’ first home was a small, two bedroom with a down payment from my father’s grandmother. My parents and the babies slept in one bedroom and 2 men rented the other bedroom, and also boarded there. I think one of my aunts slept on the living room couch. But with 4 children, they sold it and bought a larger 2 bedroom one street over (3 girls in one bedroom and my baby brother in my parents’ room) and didn’t need boarders to pay the mortgage. No grants, subsidies, tax credits, just a loan from a family member and a mortgage based only the husband’s income (even in the early 60s, a wife’s income wasn’t taken into consideration on what a mortgage applicant could afford).
According to my 2008 blog entry, The Columbus Housing Partnership (dba Homeport) was 20 years old then and had developed over 4,000 affordable homes which had served over 23,000 people. So CHP is now 30 years old—should there be any lack of affordable housing in Columbus? When the original owners 30 years ago, moved out and up, shouldn’t new home owners have taken their place? The original owners would now be grandparents able to help out family members, right? Other agencies mentioned in the Business First article were Coalition on Homelessness and Housing in Ohio (which was founded in 1974), Affordable Housing Alliance of Central Ohio, Affordable Housing Trust for Columbus and Franklin County, and Columbus Department of Development.
I’ve seen real estate ads for Columbus that are definitely affordable, and closer to public transportation than planting a development in the suburbs, but they are all in neighborhoods that need good city support—police, fire, schools, small shopping areas, decent utilities, etc. and none will qualify for various fancy loan vehicles. I think they are looking in all the wrong places for affordable housing.
http://www.hsh.com/finance/mortgage/salary-home-buying-25-cities.html#cleveland
In Pittsburgh home buyers would need an annual income of $32, 617 and the median home price is $135,000.
http://www.trulia.com/property/3191271042-116-Woodgate-Rd-Pittsburgh-PA-15235
But in San Francisco, at the other end, buyers would need an annual income of $142,338 to buy a home in the median range of $742,900!
My wife and I bought our perfect house in South Carolina in 2007. Acre lot, backed up to a private golf course, 4000 sq.ft., 3 car garage. In 2008 the market crashed. In 2009, we moved when I accepted a much better job.
We put the house on the market and for two years it sat empty as we tried to sell it. We finally leased it but the lease market was saturated due to so many unsold houses on the market, so the monthly lease payment we received only covered 60% of the mortgage payments. Two years ago we lost our homestead exemption and our property taxes went from $1900 a year to $9200 per year and our insurance doubled from $1400 to $2800 a year.
We kept hoping that the market would rebound but it never has - but we never missed a mortgage payment. In 7 years, we were never even late.
This Friday, I close on the house - finally it is sold. It was the second offer that we received on the house in 5 years.
It sold for $120,000 less than we paid for it, so we lost every dime of equity we had in it. The selling price was less than what was left on the mortgage, so I had to make up $35000 in deficit to pay off the mortgage and with all the fees and prorated taxes and such, to sell my house cost me right at $67,000 out of pocket this week.
And yet I personally know of people who just walked away from houses in similar situations. Of course, they took a huge hit on their credit rating but they don't really seem to care, nor has it visibly affected their lifestyles.
I guess I may just be stupid but I was taught to live up to my commitments. We made a bad decision in 2007 and that decision cost us nearly $200,000 in actual cash - but it was our decision.
We decided to take the painful loss now because I can see no signs that the economy will recover any time soon because of the structural damage that has been done in the past 6 years. It was time to move on before things get worse.
So this is my view of what the President's people call a "recovery".
There is no recovery.
I thank God that we have been blessed with the financial means to survive Obama's "stewardship" of the economy and I have a special empathy for those who are struggling with the same decisions or simply cannot free themselves due to their financial situation.
We are witnessing the worst performance of a post recession economy in our history. In spite of an energy revolution, the US economy can't seem to get up off the mat. Economic policies and regulations matter. Presidents may not control the economy but they at least have the responsibility not to screw them up.
This economy is screwed up - normal capitalistic/free market economies will naturally generate growth on their own but Obama and his merry band of progodytes have ours tied down as sure as the Lilliputians did with Gulliver
Michael Smith lives in Utah and blogs at Rio Norte Line and on Facebook, where this post resides.
"As the recession lifted, poor and middle class Americans dug deeper into their wallets to give to charity, even though they were earning less. At the same time, according to a new Chronicle analysis of tax data, wealthy Americans earned more, but the portion of the income they gave to charity declined. . .Residents of Utah remain by far the nation’s most generous... Memphis, Birmingham, Ala., Atlanta, and Nashville are the most generous cities, and . . . The 17 most generous states, as measured by share of income donated to charity, voted for Republican presidential nominee Mitt Romney in the 2012 election." (Chronicle of Philanthropy)
President Obama complains about the income gap and the fat cats. Does his staff understand "optics?" (perception not physics) Last night he had a fund raiser in Connecticut, talked about wealth inequality at a lavish mansion in a gated estate, the home of Richie Richman. The economy is stagnant, the rich are getting richer, and he whines at the home of a rich man named Richman (real estate developer who's made his wealth in "affordable housing"). Federal tax credits and subsidies for “affordable housing” are very complex, but the recession of 2008-09 really had Richman’s business booming since other investors had to back off.
“Some 86% of homes in the Akron, Ohio area are within reach of middle-class buyers in the area, the highest share in the nation, according to a report from Trulia, the real estate listings site. The next two cities on the list, with 85% of homes affordable to middle class, are Dayton and Toledo, respectively.”
We were in Indianapolis over the week-end to attend an Arsenal Technical High School class reunion at the Riverwalk Restaurant in Broad Ripple, and all class gathering on the campus (70+ acres). On our way to the Tech campus we drove by our first home at 1311 North Rural (apt. 2). My. The neighborhood has certainly changed. This was a very tidy 4-unit, probably originally built to be a duplex, then the upstairs 3 bedrooms were changed to a 1 bedroom, kitchen and living room apartment with a side entrance (not visible here). It’s hard to say, but it may be back to a duplex. We couldn’t see the side entrance.
We were about 3 houses from a lovely park, and 3 blocks from 10th avenue which had a number of small stores. I still have a few kitchen items I bought from a hardware store on 10th. We can’t remember where we parked our car—there was an alley and garage behind the house, and the stairs to the street were extremely steep. Every day I drove to my job at General Mold and Engineering, and Bob caught the bus to work downtown at Ayrshire Collieries on South Meridian (11th largest coal company controlled by Pierre Goodrich at that time).
When we lived on Rural it was a working class white neighborhood, now it is mostly black with some Hispanic. The condition of the homes is really awful, with many boarded up. And as you can see, a couch on the porch is not a good sign in any neighborhood, even on college campuses studies show this is a serious indication of decay and trouble.
We never thought to take any photos when we lived there, but I’m pretty sure it was painted white and the owners, who lived down stairs, were careful with the property.
Our first Christmas in that apartment
A few months later, my college graduation photo from 1961, University of Illinois, Champaign-Urbana
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