Loss of Homeownership

In recent homeowner news…Homeownership fell to its lowest rate in 15 years during the first quarter. As more and more borrowers lose their homes to foreclosures they are forced to rent. According to the latest Census Bureau data, the percentage of Americans who are homeowners dropped a full percentage point over the past 12 months to 65% during the first three months of 2012. It’s the lowest rate since 1997.

This should not be surprising to hear. Foreclosures have been growing over the last six years. The rental vacancy rate dropped to 8.8% during the first quarter. Because of this change, rental markets have experienced added pressure. Many investors are now buying up distressed buildings, fixing them up, and renting them. House flipping is back, but instead of houses, people are remodeling rental apartments.

The census last quarter reported that the median asking rent was $721, which was up by 5.6% compared to 12 months ago. It was found that rents were highest in the Northeast with an average of $932. In the West, average rent was $845; in the south, average rent was $660; and in the Midwest, average rent was $607.

Furthermore, home prices are continuing to fall. All age groups, races and regions have experienced a loss in homeownership. In this economy, many households cannot even afford rent, leaving them on the streets.

According to the National Coalition for the Homeless, each year 3.5 million Americans experience homelessness. On any given night, 700,00 people are homeless in the HUD Homeless Support Services Network.

The National Coalition for the Homeless believes that the shortage of affordable rental housing and the increase in poverty are largely responsible for the growing number of homeless people. The problem lies not only in the lack of proper housing facilities, but in the mental and physical wellness of the homeless, who have been struggling with personality disorders and substance abuse.

It is unfortunate to know that the number of homeless families with children has significantly increased over the past decade. Households with children are the fastest growing segments of the homeless population. The number of families experiencing homelessness is rising while the number of affordable housing units is shrinking. More and more families are forced to stay in shelters for longer periods of time. For example, in the 1990s, families stayed in homeless shelters for an average of five months before moving on to permanent housing. Today, the average stay is 5.7 months. Some surveys reported that it was closer to a year.

Because housing takes up a significant portion of income, households must often sacrifice housing in order to pay for other expenses such as healthcare, food, and education. Consequently, housing is often the expenditure that is dropped. With the poverty rate at a recent all time high, it is becoming even more challenging to maintain housing.

For instance, the 2011 Census Bureau reported that 46.2 million Americans are living below the official poverty line. It was the highest poverty rate in 52 years. Everyday America’s poorest citizens are on the verge of homelessness. Housing is something that a person should have access to regardless of one’s socioeconomic condition.

Minimum Wage Workers: Barely Getting By

“For decades, having a decent, safe place to call home has been a cornerstone of opportunity in America- a place where we can raise our families, connect to our communities, and pursue better opportunities for ourselves and our children.”- HUD Secretary Shaun Donovan

Having a decent, safe place to call home is no longer the given for working people in America. The lack of affordable housing has lead to poor housing conditions, rent burdens on the poor, and overcrowding in the form of doubling-up. Americans can no longer rely on affordable housing and housing assistance programs to get by. It turns out that public housing has not been built in decades! In fact, the public housing stock is dwindling due to demolition and the lack of federal funding. The shortage of affordable housing is negatively impacting the housing stability of America’s lowest-income households.

Americans, working full-time minimum wage jobs, cannot afford rents in the private market. Here is a simple map to really convince you of this crisis. It shows how many hours per week a minimum wage worker in every state would need to work in order to afford the rent and utilities of a market rate, 2-bedroom apartment.

For instance, a person, living in California, would need to work 130 hours per week to afford a 2-bedroom apartment. Yes, you heard me right; 130 hours! That’s 130 hours of flipping mechanically separated meat! Keep in mind, there are 168 hours in a week.

In 17 states across the country, minimum wage workers would have to work more than 88 hours per week. In 19 states, workers would have to work 71 to 88 hours and in 15 states, they would have to work 70 hours or less.

I’m going to go out on a limb here and say that something is wrong. We live in one of the wealthiest countries in the world and yet millions of U.S. citizens are unable to rent a 2-bedroom apartment without outside help. Frankly, it’s embarrassing. The disparity between what wageworkers can afford to pay and what is available for them in the private market is shocking. It is ridiculous how little one can afford living on a minimum wage income.

Excuse me, Shaun Donovan, but how can we “pursue better opportunities for ourselves and our children”, when we cannot even afford an apartment to live in? Not everyone has the privilege of going to college and getting a good education. Minimum wage earners should at least have the privilege of living in a decent apartment to raise their families in.

Let’s not forget that millions of wageworkers work FULL-TIME jobs. According to the Bureau of Labor Statistics, the average wage earner works 34.5 hours per week. And this is even with our terrible economy; millions have seen their hours cut back.

It is discouraging to know that even if you work a full time job, you can still not afford a market rate, two-bedroom apartment. This country should reward those who work full time jobs (even minimum wage jobs) with adequate housing. Every working American should have a decent place to call home.

It is not very surprising to hear that 2.15 million adults and 1.35 million children are prone to experience homelessness in a given year. I wonder how that happened? 

New FHA Rules

You are probably wondering what is new in the housing world? Well, for anyone who is trying to buy a home or wants to buy a home, you should be aware of the new loan requirements! Don’t worry it’s nothing too drastic.

FHA is about to make it more difficult to borrow money to buy a home. On April 1^st, Uncle Sam will begin to crack down his whip on unqualified borrowers. FHA will no longer loan money to borrowers with debts of $1,000 or more. This new rule even pertains to borrowers with perfect credit scores. They also can be denied a loan if they are in debt $1,000 or more.

Before this, borrowers, who were in disputes with creditors over debts, could still be approved for a loan based on their prior credit history. With this new policy in place, lenders will have to justify to FHA why they are granting a loan to a particular person. They will have to prove to FHA that the loan was given to a qualified person based on proper documentation.

FHA does give the borrower a chance to show that they are worthy of a loan. The quote on quote risky borrower has the right to prove that the debt is paid off or in the process of being paid off. The borrower can also explain why the disputed loan is somehow wrong.

The agency is doing this in an effort to reduce its risk. It is all in an effort to improve their depleted reserve fund. Furthermore, FHA plans to charge more for insurance premiums.

I believe these new requirements to homeownership are good for potential homebuyers. It is a way to protect potential homeowners from buying a home that they cannot afford later on. It stops them from getting a loan that they ultimately will not be able to pay back. Denying unqualified borrowers loans will ultimately reduce the risk for FHA. Because of the devastation that the housing burst created for millions of homeowners, FHA must now be more cautious with whom they pass out loans to.

However, this new policy could slow down the housing market recovery even more. If fewer and fewer borrowers can secure FHA mortgages, then more and more people will not invest in the housing market. These loans are one of the few options available to homebuyers needing low down payment mortgages. It could potentially keep a lot of people out of the housing market.

Overall, I think this is positive news. Potential homeowners might not like that there are more barriers to entry, but it will help everyone in the long run. It could affect the housing market in the short run, but it is better if FHA grants loans to qualified homebuyers. It will hopefully prevent another housing bubble to form.

It is a little disheartening that FHA just made this new policy. You think this requirement would have been the status quo from the very beginning. 

To Buy or Rent?

To buy or not to buy that is the question. People are always wondering if they should buy or rent. The buy versus rent scenario has been an ongoing question.

In today’s market, buying a home is much cheaper than renting. Finally, the answer has never been more obvious. Thank goodness!

It is unusual that buying is the better choice since renting seems to come out ahead most of the time. Mortgage payments, maintenance and transactional costs, and property taxes make buying less appealing. But not anymore!

According to Trulia, the online real estate company, buying a home is more affordable than renting in 98 of the top 100 housing markets. Only in San Francisco and Honolulu is renting the better option. There are several reasons why this trend has taken off. Home prices are falling and mortgage interest rates are at low levels. At the same time, rents are extremely high and on the rise.

According to rent.com, rents have the potential to rise 7% in each of the next two years. Nationally, home prices are down by more than 30%.

However, many people are not in the position to buy a home. Despite lower rates, the greatest barrier to homeownership is getting a mortgage. Saving up for a down payment for a home is difficult for renters paying rent each month. It often pushes renters away from owning their own home.

You are probably wondering what the cheapest buyer’s market is. And the winner is…Detroit. Turns out Detroit is the place to be when it comes to buying a home!  Toledo, Ohio, Oklahoma City, Dayton, Ohio, and Warren, Michigan are other areas where buying a home is much better than renting.

However, you must take into account submarkets within a single housing market. Also, the size of the home is an important factor when deciding to rent or buy. In some markets, renting could be the wiser choice with a larger house. In places like New York, Boston and Dallas, renting is still considered more favorable.

Ken Johnson, a real estate professor at Florida International, believes that home prices nationally have bottomed. He says that “Markets should slowly start to recover. Housing will return to its traditional role of a safety investment.” Basically he is trying to encourage people to stop renting and buy while the market is low. It could end up being a great long-term investment once home prices begin to rise.

So, if you have the money and you are ready for the commitment of a home, then you should take the leap and BUY, BUY, BUY! Home prices are only going to go up in the next few years. If you are thinking about buying, right now is the best time to make moves. In the long run, it is the best investment you can make. Many experts believe that paying off a mortgage is a forced savings plan. You are less likely to spend your savings. 

Overall, it’s a big decision that needs to be thoroughly thought out. 

Decline in Home Prices

I’m sad to report that national home prices have taken a hit. In the fourth quarter of 2011, national home prices fell 4%. While this might not seem like a big deal, it’s the biggest drop in home prices since 2008. The last time home prices were this low was in 2002. It is crazy to think that we could be back to 2002 levels. This ultimately means that signs of stabilization in mid 2011 did not last through the rest of the year.

Even after prices dramatically fell in 2007 and 2008, the declines over the past few years have been relatively moderate. So why have we reversed back all of a sudden?

Once again, the economy and consumer confidence are still very weak. Clearly, it is going to take more time to fully recover. Just because there are a few quarters of stabilization does not mean that the housing market will remain steady.

Right now home prices are all over the place. It is almost impossible to accurately predict how home prices will hold up in the next few years.

Even multi-million dollar homes are experiencing large numbers of foreclosures and major price declines. According to RealtyTrac, America’s richest families are losing their homes to foreclosures at a faster rate than the rest of the nation. It is a common assumption that these things only happen to low-income families. However, more and more upper-middle class households are forced to sell their dream homes. The problem is that selling your home in a high-end neighborhood is very challenging in today’s market. The pool of interested buyers is very limited.

In my hometown, Corona Del Mar, California, I have seen home prices dramatically fall in the past couple of years. Homes, which were once multi-million dollar estates, have significantly deprecated in price. Last year, more than 36,000 homes valued at $1 million or more were foreclosed on.

My family’s neighbor of more than 10 years has been trying to sell his home for the past year. His house was first listed for $3.3 million. It is now listed for $2.3 million. Most real estate agents believe that homes over the million dollar mark are particularly hard to sell. The market for homes over a million is just not there. If the home does not sell soon, he will have no choice but to proceed with a foreclosure.

With the economy in the dump, my family’s neighbor can no longer afford his home nor can he wait around for the home to sell. He owned 2 restaurants that unfortunately did not make it through the recession. He happened to be in the wrong end of the market. Because of this, he can no longer pay his mortgage payments.

It is sad to witness this kind of thing. He was a very hard worker who spent years building his dream house. He had a lot of his savings tied up in his home. Now, he will end up losing all of that.

Say NO to Rent Control!

Let’s talk about rent control. Spoiler Alert: I’m not a fan. Rent control has been a controversial housing policy in the United States since its arrival in the 20^th century. The actual practice and implementation of rent control is inefficient, unfair, and counteractive. Yeah I said it!

Proponents argue that rent control is necessary in order to protect tenants from paying unreasonable rents and in order to provide access to decent housing. Wake up people it causes more problems than good! Don’t get me wrong; I’m all about affordable housing. Rent control is NOT the answer to our housing problems. No way Jose!

It's time to break it down. Rent control is economically counterproductive. With rent control in place, landlords struggle to make a reasonable return on their investment. Rent control is unfair for property owners of rent-controlled units. Because rent-controlled housing is not considered profitable, landlords might convert their property into a higher revenue producing development. This action reduces the number of rental housing available to the large population of renters.

Rent control exacerbates the housing shortage problem. Often times, landlords turn rental housing into condominiums or commercial uses. From the property owner’s perspective, it does not make sense to own property that is not profitable.

Furthermore, landlords have little incentive to maintain rent-controlled properties. As a result, housing quality and maintenance in rental housing dramatically declines. It would be foolish for a landlord to spend extra money on building repairs when he or she is not earning a fair profit. In worse cases, housing deterioration occurs. As a result, more and more landlords neglect their rental buildings. Hello, slum housing!

Rent control means no income restriction. Rent control was created to protect low- and moderate- income tenants from extreme rent increases. That’s funny since there is no income check to determine who should benefit from the perks of rent control. In fact, even multimillionaires receive protection under rent control. In other words, an individual earning a mere $20,000 per year could potentially spend the same amount on housing as an individual earning $100,000 per year. In my book, that’s not okay!

 Rent control does not necessarily help low-income people. There is no reason why we should be helping individuals who are more than capable of paying market rate rent. It’s absurd!

Lastly, rent control causes discrimination. Landlords often discriminate against tenants that are likely to stay for long periods of time. Retirees and couples with children receive the brunt of the discrimination. Because landlords can increase rents between vacancies, many landlords evict tenants for any possible reason. Rent control causes displacement as landlords remove tenants in order to raise rents. Does that seem fair to you?

So what I’m saying is rent control is an inefficient and detrimental housing policy! The social and economic cost of rent control completely outweighs any short-term gains that may exist. Rent control does not preserve affordable housing for low- to moderate-income households. Instead, it causes more burdens on the poor.

We should focus our attention on increasing the housing supply and providing low-income individuals with direct financial housing assistance. The government should increase the number of programs that subsidize the development or redevelopment of affordable housing. Rent control is an outdated policy that cannot be justified as a solution to our housing crisis! 

My Social Bookmarking Soul Mate

Even though I haven’t been able to find my real life soul mate (sad face), I have found my cyber soul mate. His name is Philip Rothman. I might not know what he looks like, where he lives, or what his favorite color is, but I do know that we have very similar interests. We both like long walks on the beach, watching movies, and laughing… just kidding, he is not my romantic soul mate. Unfortunately, I didn’t find him on eHarmony! But, like any great soul mate, we have a lot in common.

I found Philip through handy dandy Diigo. I went to “My Networks” and clicked on “Search Diigo users of interest”. Under “By Tags”, I typed in “housing” in the search engine. Diigo searched its users for people who were interested in topics related to housing. After searching a few pages, I stumbled upon Philip. He caught my eye. Some of his top tags are “financial crisis”, “recession”, “employment”, “housing”, “health care”, “real estate”, “monetary policy”, “forecasting” and “regulation”. While his tags are a little heavy on the financial side of things, he bookmarks a lot of sites and articles pertaining to housing.

Philip has a total of 2025 public bookmarks. He last bookmarked in 2010. I’m not sure why he hasn’t bookmarked recently, but he used to be very active with his bookmarking. Philip bookmarked almost every other day. He seemed to be very thorough with his bookmarking. He regularly commented on most of his bookmarks. Some of his comments are brief while others are very extensive and thorough. He came across like he was very passionate and fascinated with the housing and financial markets.

Back in April 21, 2010, I found it interesting that he bookmarked a blog post from Calculated Risk. Calculated Risk is currently on my blog list. I find the blog very educational and intriguing. I guess it’s true, great minds DO think alike! Philip is also very interested in professional blogs. He has a tendency to bookmark blogs from New York Times, WSJ, and Bloomberg. I also find these professional blogs helpful when I am researching information on housing.

Philip introduced me to Real Clear Markets. I had never heard of this website before. Ever since Philip directed me to it, I can’t get enough! It discusses news related to business, economics, housing, and finance. Every day Real Clear Markets posts different articles from TIME, The Economist, BusinessWeek, MarketWatch, Forbes, and Washington Post, to name a few. It is nice because you can go to one site to see what popular publications and newspapers are talking about. You can quickly see top stories and important news. It saves a lot of time. This site could be very useful to my readers! Thanks Philip!

Even though Philip has not bookmarked in a while, he frequently bookmarked during the housing crisis. It could be useful to go back and see what he was bookmarking about during that time. Past articles are just as important as current news pertaining to housing. It is interesting to track what blogs and other publications were predicting and commenting on when the bubble burst.

Foreclosures on the loose!

Foreclosures! Foreclosures! Foreclosures! AHHH! The sound of the word makes me cringe! When will the madness end? Will we ever get out of this mess we call the housing crisis? Who really knows? But as always, there are many predictions on the matter.

Even though hundreds of thousands struggling homeowners have been helped by the $26 billion mortgage settlement, it will bring even MORE foreclosures… and the madness continues.

Here’s the problem, folks. As lenders were waiting for the settlement to be determined, they held off on repossessing homes. As a result, there was a backup of troubled loans. Many of these foreclosures should have been filed in 2011. Instead, 2012 will be hit with a crap-load of foreclosures (pardon my French). Now that the settlement has been figured out, banks will start to reach out to delinquent homeowners to figure out which loans can be saved.

Daren Blomquist, vp of RealtyTrac predicts

“new [foreclosure] filings will climb from 1.9 million in 2011 to between 2.2 million and 2.5 million this year”.

Blomquist goes on to say:

"We think what we saw in 2011 was artificially low foreclosure numbers"

This is unfortunate to hear since the foreclosure rate went down 34% last year. Just as you think we are climbing out of the ditch, we fall right back in. Without a doubt, the increase in foreclosures will cause plenty of problems in the short term. I’m hoping this is a minor bump in the road. My optimistic self believes it is all part of the recovery process.

However, foreclosures have a devastating effect on housing markets. A concentration of foreclosed homes can drastically affect the property values of the entire neighborhood and community. Foreclosed homes become vacant and eventually become distressed and blighted. Non-foreclosed homeowners begin to leave the neighborhood as home values begin to spiral down. It creates a vicious cycle. REOs sell for half as much as a non-foreclosed property. A multitude of foreclosed homes leave neighborhoods in shambles.

Let’s take a look at Las Vegas, the poster-child for foreclosures. The entire city has taken a major hit. Las Vegas claims the top 5 hardest hit zip codes in the United States. A neighborhood in North Las Vegas had an astonishing 2,469 foreclosure filings in 2011. Yikes!

Even though the $26 billion mortgage settlement will cause an increase in foreclosures, it could help millions of struggling homeowners get back on track. $17 billion will go to reducing the principle owned by underwater homeowners and homeowners who are behind on their mortgage payments. It is estimated that the principle reduction will affect about 1 million homeowners.

I’m not saying its going save the entire housing market, but I do think it will help the situation. Anything at this point would make a difference! Unfortunately, most people need a greater principle reduction. It is unclear how far the money will actually go.

I guess it’s up to the Housing Gods to decide. Let’s keep our fingers crossed! 

Trifecta

Hello world:

Lets begin this blogging journey by taking a step back to 1949. Random I know, but brass yourselves! In 1949, the United States passed the American Housing Act (I’m sure that’s the first thing that popped into your mind). The 1949 Housing Act was one of the largest national housing policies in the United States. It expanded the federal governments’ role in mortgage insurance, urban renewal, and the construction of public housing. Its objective was to create a “decent home and a suitable living environment for every American family”. Keyword… “EVERY”. *Cough* ya right *Cough*.

Funny, since its now 2012 and this goal is far from being met. Come on America! It’s time to get it together! Millions of households are living in dwellings above their means or have no kind of shelter at all. Housing costs WAY more than it used to (rough times).  In the 1960s, food constituted for one-third of a household’s budget. Today, food constitutes one-seventh of a family’s budget (I guess that makes sense…Del Taco does offer a delicious 49 cent taco). The costs of housing, healthcare, and childcare have all risen disproportionately. For the purposes of my blog and my overall sanity, I will only be focusing on housing. Ha! Like that’s an easy task!

So, you are probably wondering who I am and how am I qualified to talk about the housing crisis? First off, lets be clear people—I’m not claiming to be an expert of any kind. However I do have an invested interest in the housing market. I am currently majoring in public policy with an emphasis in real estate development. Sounds pretty fancy! Now, you are probably wondering why should I listen to a college kid? Well, I suppose you don’t have to. It’s a free country…last time I checked! But if you want to read or learn more about issues pertaining to housing, then you have come to the right blog… aka it’s going to be a life-changing experience!

Housing is a topic that I find myself thinking about and researching often. My blog will focus on how we got ourselves in this current predicament and how we can improve the overall housing problems in the United States (super easy to figure out!) I will examine and critique current housing policies and programs in order to get a better understanding of how things can be fixed. Affordable housing has always been a problem. A household should spend no more than 30% of their annual income on housing. Public housing, HUD section 8, inclusionary zoning, and rent control are all housing programs that are meant to increase affordable housing options. They all have good aspects and intentions, but they all have shortcomings. As a result, slum housing and homelessness continue to exist. With the burst of the housing bubble and the collapse of the sub-prime mortgage system, our housing crisis has become even worse (shocker!). Millions of Americans cannot pay off their mortgages. Foreclosure rates continue to rise while home values continue to depreciate. Home construction is at an all time low.

Oh me, Oh my! Sounds to me like the world is coming to an end…Oh wait, it is! We have until December 21^st to solve this housing crisis!!! We can do it…NOT! Sorry, I’m being kind of a Debbie Downer, but there are so many problems with housing. It can be overwhelming. I can’t help but get carried away. But I am genuinely optimistic that things will improve with time. We have to have a little faith…right? Maybe I am being naïve, but I still have hope.

Profile:

What could be better than a doctor specializing in the housing market? To me, it doesn’t get much better! When it comes to short term and long-term illnesses pertaining to housing, Dr. Housing Bubble can cure any problem! Well not really, but he/she is on top of his/her housing news. I’m not sure who the mastermind is behind this blog, but this person is very informed. The doctor posts daily responses on new developments in the housing and real estate world. Dr. HB (we are on a nickname basis) shares his/her opinions and frequently references news articles pertaining to housing. Like a podiatrist or an optometrist, Dr. Housing Bubble specializes in Southern California real estate.

Because Dr. Housing Bubble is a real doctor (obviously), the blog is pretty academic in nature. It’s the most scholarly blog I’ve ever come across! Let’s be real, he uses graphs in almost every post! Even though the content is heavy and can often times be overwhelming, Dr. HB talks about housing in a relatable and comprehensible way. Every once in a while, he/she will throw in a joke or a sarcastic comment to lighten the mood. In a past post, the doctor complains that sellers, agents, and bank handlers often do not fix up homes before they attempt to sell them. Doctor HB jokes that the grass is so unkempt and high that “a California mountain lion could be living there”. Okay, it’s not the funniest joke you’ve ever heard, but it still makes things more enjoyable to read.

Like any great doctor, he/she frequently gives advice to people looking to invest in real estate. The Doc makes sure to give the most relevant and accurate recommendations based on the information at hand. Doctor HB has many clients that follow his/her blog. He/she is a pretty renowned housing doctor. The good thing about the doctor is that you don’t have to wait for an appointment! (sorry, bad joke)

Even though the blog uses lots of real estate jargon, you don’t have to be a real estate expert to understand the content. In a recent post, Dr. Housing Bubble states:

“The desire to buy has not been removed from the current market but the psychology surrounding American real estate has definitely been shattered”… “This is why even with low interest rates and many homes available to purchase, home sales are still anemic”.

Dr. Housing Bubble is a mastermind at analyzing current housing trends. The Doc always has an explanation for most things that happen in the housing world. He blames top real estate associations for overstating sales:

“Not so much of a shock here but you have to realize that one of the top associations for real estate basically is saying they were off on their bread and butter business for years.  This is like a doctor saying he over diagnosed 15 to 25 percent of his patient with a severe illness.”

It’s clear that Dr. HB knows what’s up? Dr. Housing is often critical of our housing problems and realizes who is at fault. Like Dr. Housing Blog, I hope to make my blog informative and stimulating. My blog will be more on the informal side, but still present concrete information. While Dr. Housing Bubble focuses solely on the housing bubble, I plan to touch on deep-rooted problems within housing such as affordable housing and homelessness. It’s going to be the real deal! Get excited!

Voice Critique: 

He goes by Chuck Ponzi… well at least that’s his name in the blogging world. I’m pretty sure he’s not actually related to Charles Ponzi! (I sure hope not!) Either way Chuck is the writer of “Southern California Real Estate Bubble Crash Blog” (it’s a mouthful, I know). While he hasn’t written a recent blog post in sometime, good old Chuck Ponzi caught my eye. Chuck is a true character. He doesn’t hold back. He is opinionated. He is confident. He says it like it is.

Chuck is certainly not shy. He is the epitome of cynical and sarcastic. However, he is still likeable and relatable. The way he puts words together paints a vivid image for the reader. He is witty and truly a very funny guy. Most of his posts are filled with mockery and ridicule. In the post entitled, “No Frog March for Mozilo”, Chuck rips into Angelo Mozilo. Chuck shows no mercy.

Chuck rarely disappoints. Even if you had no hard feelings towards Mozilo to begin with, by the end of this post you hate him too! In fact you hate the entire financial sector! You are automatically on Chuck’s side. He certainly has a way with words. Chuck uses very strong language to evoke a feeling of disgust and disdain. His diction is very descriptive and filled with insults (e.g., “trash-filled piece of financial garbage” “rich fools” “gold-plated toilets, “porn parties”, “fine the crap out of him”). His writing is pretty informal. He often uses parentheses and caps lock to get his point across. Chuck ends the post with “Couldn’t happen to a nicer guy, too.” It doesn’t get anymore sarcastic than that! He even compares a picture of Mozilo to a picture of the Grinch. I’m not gonna lie, Mozilo has found his doppleganger!

While most of his posts are filled with insults and sarcasm, Chuck’s post, “Buying a house” is endearing and helpful. He talks about the process of buying a home for his family. He is eager to help.

Chuck writes…

“In the end, we waited over 6 years before becoming homeowners again, we found that the emotional decision to buy a home is quite powerful for people that have already owned; it was for us”.

He ends the post with…

“Feel free to ask any questions that you might have in the comments; I will be as honest as I can”.

Under that sarcastic façade is a passionate guy ready to give advice to others. He almost becomes sensitive and conscious of others’ feelings. But don’t get too used to nice Chuck! In the very next post, he is right back to his normal cynical self!

Voice Post...Chuck Ponzi!

He goes by Chuck Ponzi… well at least that’s his name in the blogging world. I’m pretty sure he’s not actually related to Charles Ponzi! (I sure hope not!) Either way Chuck is the writer of “Southern California Real Estate Bubble Crash Blog” (it’s a mouthful, I know). While he hasn’t written a recent blog post in sometime, good old Chuck Ponzi caught my eye. Chuck is a true character. He doesn’t hold back. He is opinionated. He is confident. He says it like it is.

Chuck is certainly not shy. He is the epitome of cynical and sarcastic. However, he is still likeable and relatable. The way he puts words together paints a vivid image for the reader. He is witty and truly a very funny guy. Most of his posts are filled with mockery and ridicule. In the post entitled, “No Frog March for Mozilo”, Chuck rips into Angelo Mozilo. Chuck shows no mercy. Below is the infamous post! (I know it’s long but trust me it’s totally worth it)

Chuck writes…

“After Mozilo sold Countrywide, the most trash-filled piece of financial garbage to some rich fools who soon became parted with their money, many in the bubble blogosphere assumed that at the very least, some criminal activity had taken place by CEO Angelo Mozilo who had reaped more than $300 Million (yes, you read that correctly) in sale of his stock.

Imagine all of our surprise when not only did nothing happen, but we heard nothing of the matter whatsoever. What ever happened to financial fraud?

Well, at least the SEC had enough presence of mind to fine the crap out of him and get a settlement check. Hurry, quick, I would cash it right away, but don’t spend it all in one place, you might need to hire some people to investigate all of the other financial frauds you’re responsible for finding. (Madoff, Stanford, etc)

Actually, I just hope they don’t blow it all on gold-plated toilets and Porn Parties.

Either way, I’m glad to see SOMETHING happen. Couldn’t happen to a nicer guy, too.”

See I told you it was entertaining! Chuck rarely disappoints. Even if you had no hard feelings towards Mozilo to begin with, by the end of this post you hate him too! In fact you hate the entire financial sector! You are automatically on Chuck’s side. He certainly has a way with words. Chuck uses very strong language to evoke a feeling of disgust and disdain. His diction is very descriptive and filled with insults (e.g., “trash-filled piece of financial garbage” “rich fools” “gold-plated toilets, “porn parties”, “fine the crap out of him”). His writing is pretty informal. He often uses parentheses and caps lock to get his point across. Chuck ends the post with “Couldn’t happen to a nicer guy, too.” It doesn’t get anymore sarcastic than that!

While most of his posts are filled with insults and sarcasm, Chuck’s post, “Buying a house” is endearing and helpful. He talks about the process of buying a home for his family. He is eager to help.

Chuck writes…

“In the end, we waited over 6 years before becoming homeowners again, we found that the emotional decision to buy a home is quite powerful for people that have already owned; it was for us”.

He ends the post with…

“Feel free to ask any questions that you might have in the comments; I will be as honest as I can”.

Under that sarcastic façade is a passionate guy ready to give advice to others. He almost becomes sensitive and conscious of others’ feelings. But don’t get too used to nice Chuck! In the very next post, he is right back to his normal cynical self! 

Blog Profile... Dr. Housing Blog!

What could be better than a doctor specializing in the housing market? To me, it doesn’t get much better! When it comes to short term and long-term illnesses pertaining to housing, Dr. Housing Bubble can cure any problem! Well not really, but he/she is on top of his/her housing news. I’m not sure who the mastermind is behind this blog, but this person is very informed. The doctor posts daily responses on new developments in the housing and real estate world. Dr. HB shares his/her opinions and frequently references news articles pertaining to housing. Like a podiatrist or an optometrist, Dr. Housing Bubble specializes in Southern California real estate.

            Because Dr. Housing Bubble is a “real” doctor (obviously), the blog is pretty academic in nature. It’s the most scholarly blog I’ve ever come across! Let’s be real, he uses graphs in almost every post! Even though the content is heavy and can often times be overwhelming, Dr. HB talks about housing in a relatable and comprehensible way. Every once in a while, he will throw in a joke or a sarcastic comment to lighten the mood. In a past post, the doctor complains that sellers, agents, and bank handlers often do not fix up homes before they attempt to sell them. Doctor HB jokes that the grass is so unkempt and high that “a California mountain lion could be living there”. Okay, it’s not the funniest joke you’ve ever heard, but it still makes things more enjoyable to read.

            Like any great doctor, he/she frequently gives advice to people looking to invest in real estate. The Doc makes sure to give the most relevant and accurate recommendations based on the information at hand. Doctor HB has many clients that follow his/her blog. He/she is a pretty well-known housing doctor. The good thing about the doctor is that you don’t have to wait for an appointment!

            Even though the blog uses lots of real estate jargon, you don’t have to be a real estate expert to understand the content. In a recent post, Dr. Housing Bubble states that the “desire to buy has not been removed from the current market but the psychology surrounding American real estate has definitely been shattered”. He/she goes on to say, “This is why even with low interest rates and many homes available to purchase, home sales are still anemic”. Dr. Housing Bubble does a good job of analyzing current housing trends.

            The Doc always has an explanation for most things that happen in the housing world. He blames top real estate associations for “overstating sales for multiple years. This is like a doctor saying he over diagnosed 15 to 25 percent of his patients with a severe illness”. Dr. HB is often critical of our housing problems and realizes who is at fault. However, he remains optimistic.

            Like Dr. Housing Blog, I hope to make my blog informative and stimulating. My blog will be more on the informal and light-hearted side, but still present concrete information. While Dr. Housing Bubble focuses solely on the housing bubble, I plan to touch on deep-rooted problems within housing such as affordable housing and homelessness. 

Hello World!

Lets begin by taking a step back to 1949. You are probably wondering why we would do that? Well, in 1949, the United States passed the American Housing Act. The 1949 Housing Act was one of the largest national housing policies in the United States. It expanded the federal governments’ role in mortgage insurance, urban renewal, and the construction of public housing. Its objective was to create a “decent home and a suitable living environment for every American family”. I’m bringing this up because it’s 2012 and this goal is far from being met. Millions of households are living in dwellings above their means or have no kind of shelter at all. This is due to the fact that housing costs way more than it used to. In the 1960s, food constituted for one-third of a household’s budget. Today, food constitutes one-seventh of a family’s budget. The costs of housing, healthcare, and childcare have all risen disproportionately. Its crazy how drastically things can change in a matter of 50 years. For the purposes of my blog and my overall sanity, I will only be focusing on our housing crisis. Like that’s an easy task!

            So, you are probably wondering who I am and how am I qualified to talk about the housing crisis? First off, lets be clear—I’m not claiming to be an expert of any kind. However I do have an invested interest in the housing market. Growing up, my dad would always talk about the housing problems in this country. At the time, I had no clue what he was talking about! Now that I have grown up, I understand where he was coming from. I am currently majoring in public policy with an emphasis in real estate development. Now, you are probably wondering why you should listen to a college kid? Well, I suppose you don’t have to. But if you want to read or learn more about issues pertaining to housing, then you have come to the right blog. Housing is a topic that I find myself thinking about and researching often. My blog will focus on how we got ourselves in this current predicament and how we can improve the overall housing problems in the United States.

            I will examine and critique current housing policies and programs in order to get a better understanding of how things can be fixed. Affordable housing has always been a problem. A household should spend no more than 30% of their annual income on housing. Public housing, HUD section 8, inclusionary zoning, and rent control are all housing programs that are meant to increase affordable housing options. They all have good aspects and intentions, but they all have shortcomings. As a result, slum housing and homelessness continue to exist.

            With the burst of the housing bubble and the collapse of the sub-prime mortgage system, our housing crisis has become even worse. Millions of Americans cannot pay off their mortgages. Foreclosure rates continue to rise while home values continue to depreciate. Home construction is at an all time low.

            Even though there are many problems pertaining to housing, I am optimistic that things will improve with time. We just have to be patient! I look forward to blogging about these issues and hopefully learning more in the process.