Has the Housing Bust Ruined Your Area?

[Exile]

In 1984, DW and I made our first and last venture into homeownership. We didn't realize that the subdivision that we moved into was fraught with unqualified borrowers who had obtained their home loans through ARM's that the S & L's had just begun to issue. Many of our neighbors lost their homes when their mortgage payments increased and they found themselves upside down on their properties. Lenders in our locale ceased conducting background checks on prospective tenants and rented out foreclosed homes to occupants whose sole qualification was an ability to breathe. So the neighborhood, which it turns out was borderline to begin with, went to hell. We had a succession of next door neighbors, for example who were not only financially unstable, but also mentally unbalanced.

Have the recent housing-bubble burst and subsequent economic meltdown damaged your neighborhood with problems such as abandoned homes and squatters moving into the area? Even if you've been able to hang on to your property, have you been demoralized and even physically threatened by these changes? If you've been able to cope, how have you done so?

[momof1in150]

I guess living is a high cost area sheltered us somewhat from a lot of foreclosures (so far). We have about 3-5 at any time but they are being purchased immediately by people looking for a good deal or those looking for investment properties. Our housing prices are still too high and that is why people are unable to see their homes.

We also live on an island so most people don't just come here to live as they would in cities or suburban areas. We have a lot of military that turn over every 10 months so there are a lot of houses that people wanted to sell that are turning into rentals and the military people are choosing to rent instead of living in base housing.

[MonkeyMama]

Uh, yeah. I am very concerned for the more "short run."

I think in the long run it will work out.

Our immediate neighborhood is doing okay for now, but it worries me. We live in a newer development and bought at the bottom of our development. A house sold recently for less than WE paid (as one of the first) so that scares me as that everyone who didn't put any money down is officially UPSIDE DOWN. Most of our neighbors paid a lot more than us since we got in so early.

Also, we live kind of in an isolated area where the growth had started but had not taken off. We have some models around and abandoned new developments, but that hadn't got very far in building yet. What we mostly have is farmland, a hotel, no retail, a school, and our development. This is okay. The community is very nice, and with things slowing I think we may get to keep our open space for a LONG while. (The bright side!) They were trying to get started on a retail/business space but due to political/flood issues they have put a moratorium on building, starting next week or something. Thank GOODNESS!!!!!! More retail/business is the last thing we need.

The other side of the freeway is another story. A lot of cheaper housing and I have heard estimates of 1 million empty square feet of retail/business space. Plus not enough police and fire (it hasn't kept up with the building and the city has its own budget crisis). It is just a MESS over there. The foreclosures and empty space has led to a spike in crime. There have been a lot of shootings and stuff at night. I don't venture over there past 10pm, and for the best. Today seems under control, but a lot of late night parties in the empty spaces, with violence. We have always had a lot of drag racing because it is rather desolate. But there is more of that in the empty parking lots. & a lot more robberies/burglaries and such. (Maybe just because of the general bad economy).

So I worry about a lot of that spreading to our development.

On our immediate street we had a foreclosure that sold VERY fast. I was impressed. (Took a month?) It was like our neighbor right across the street. The neighbors mowed the lawn while it was on the market for a short period. Some of the other houses? Have been sitting over a year (The banks are in dream land). For now the neighbors seem to do a good job of keeping up the outside and the realtors do not post signs out front to make it obvious. (It is kind of hard to tell just how many houses are in foreclosure). So for the short run things seem to be under control. For the long run though, I think values can spiral downward and there could be some tough times ahead.

I've seen figures like 1 in 3 in my neighborhood have at least defaulted on their loans. So it's pretty intense here. Houses selling for $650k in 2005 now sells for $250k. Most of that drop has been in the last year or so. I don't think we've hit bottom.

The plus side is there is a huge market for housing here. A lot of people were priced out for a long time, and our biggest market is the other HCOLAs of California. So I don't think prices to stay this low. Not at all.

Also, a LOT of retired and wealthy neighbors. This is good because I know a lot of neighbors don't have mortgages or don't sweat them. BUT these people can also leave if things get really bad. & that trend has started. Some of them are leaving just because they are disillusioned with the area. On the other hand, I think we are pretty stuck...

The home values don't bother me. A home is a home and we moved here simply so we could afford a home. So if home prices settle around $100k I could probably care less (even if we paid closer to $300k). We are still in a FAR better economic position than we were in before we moved here for the lower cost of living. BUT the reality is few of our neighbors feel the same and I think a lot of houses would be abandoned if it came to that. So that prospect is scary. But, for now, just hoping it doesn't get too bad.

I hadn't worried much about it until I saw a home sell for closer to $250k. Egads. BEfore that point most of the foreclosures were people who had paid upwards of $500k for their homes (CRAZY) and people who had borrowed large sums against their homes. But with prices getting so low, all I could see was that more people will be affected.

[Ima saver]

Our neighborhood is doing fine. Most people here are older and their houses are probably paid for. The subdivision is about 15 years old and my husband built most of the houses. There are only 2 houses in here that are for sale.

[maat55]

Oklahoma is holding its value. But who knows if the economy worstens next year. Our average sell numbers in our neighborhood are rising slowly.

[disneysteve]

Our area really hasn't been affected by the real estate bubble that much (or the economic downturn in general). Prices didn't skyrocket like in other areas and haven't crashed like they did in other areas. I haven't gotten any sense that the whole sub-prime and foreclosure issue has been a problem around here either. I don't think there was a whole lot of speculating going on since prices weren't going sky high. The only thing I did notice was that properties for sale were staying on the market a lot longer.

[Ima saver]

My neighborhood is ok, but the area I live in, is hurting badly. There are so many spec homes for sale and they just aren't selling. Plus, since most of the work around here involves construction, there are many people without jobs.

[Inkstain82]

We're in an oil boom. Housing prices are still sky-high.

[mommyof4]

I'm in NW Iowa, and we're doing ok. I think we are not being as hard hit because we tend to be a bit more conservative in the first place, and people are more likely to live in modest houses, save up for down payments, and live a little more simply to begin with.

[arthurb999]

My nieghborhood is holding strong.... like another said, it's a lot of established families and retirees that aren't going anywhere.

[ScrimpAndSave]

My neighborhood is just fine. It's interesting...I live in an established neighborhood with ranches, bilevels, split levels and two stories...all built between 1965-1970. There was one forclosure a few months ago and it sold quickly. There are new developments around me (within a 3 miles) with big gorgeous houses and many of them are in foreclosure. Sometimes it's just a great thing to live in such an established neighborhood.

[FrugalFish]

I'm in Southern California, in a region high in subprime loans, so yes.

When DH and I moved to this particular area in '97 they were in a serious housing recession. The difference then was that the houses in foreclosure were often less expensive houses around 1000-1500 square feet. The houses that have been snapped up by subprime buyers this go round have been 5000 square foot McMansions in new developments. Even if the price is great at auction, what prudent person wants or can afford to heat and cool that? I keep wondering if the McMansions will eventually be converted into condos.

Our particular street has a lot of original home owners (circa 1988), so it's doubtful we'll see any problems in our immediate locale. We bought our house in 2002 and took note of the holes around several of the windows and doors where the house had been boarded up at least once while it sat in foreclosure without buyers (probably in the early 90s). Though we renovated the place completely, we left the holes in the stucco as a pointed reminder.

[Cylenchar]

Yes... and No.... I just bought a home (Thursday was when we closed). It was a short sale so we got it pretty cheap (about 40 K less than what was owed on mortgage). However, the area we bought in is actually on the upswing. Right next to two booming areas which if the recent patterns hold true will help raise the value of our home even further. However, one of the areas we looked at last fall went from a nice working class area to graffitti, decaying nasty area..... We didn't even get out of the car in some of the areas just because it wasn't worth it to look at the homes.

[plumpossum]

I'm in Central Ohio, and we weren't hit particularly hard with the housing bubble at all, but we're still seeing the effects of it. We bought our house in 2003 for $99,000 (built in 1968, 1000 square foot ranch with 1000 square feet of basement that can be finished, and 1/3 acre in a GREAT neighborhood). As our son gets closer and closer to going into school we've begun to think about moving elsewhere, the schools are decent but pretty crowded. When we started looking into selling last year we knew we wouldn't make much return on our home, but lately it's downright shocking. A house four doors down from us listed for $124,900 (similar sized lot, but 500 more square feet, an extra full bath, and in better exterior condition) and sold for $89,900. I'm sure out in high COLA areas and to people on the coast, a $30,000 is no biggie, but that's a 30% reduction! Needless to say, we've decided to stick it out in our house until our son is in middle school, which is 5th grade here, (he is 3 1/2 now) or the market picks up significantly.

The one upside to this whole mess is that with the smaller, older homes in my neighborhood being so easy to finance five years ago, and the hopes of getting rich quick, a lot of first-time landlords were buying them up to rent out without really knowing the business. So our neighborhood was a mixture of the original owners from the mid-late sixties with immaculate yards and paid off houses, and poorly kept rentals with high turnover. Lately the rentals have been slowing down and more stable folks are coming in- even if it takes longer to sell the houses.

[Tree0164]

My nieghborhood is holding strong.... like another said, it's a lot of established families and retirees that aren't going anywhere.

Ditto... we don't have any houses for sale in my neighborhood there are 100 with on street in. The last house for sale was an older couple looking to downsize and it took 5-7 months to sell to a young family. However they did get their original asking price they had the tell to hold out for the right buyer.