News about properties and real estate
For the Debora family, the holiday season usually means making tamales and opening presents under the Christmas tree.
But there’s no Christmas tree this year. Probably no tamales either.
The four family members are trying to save their Boyle Heights home from foreclosure.
“It doesn’t feel like Christmas,” Maria Debora said in Spanish on a recent afternoon, as she stacked presents on her living room table.
“My house is just a huge expensive brick weighing me down”, writes a homeowner on a Swiss political blog. His attitude is common in Switzerland, a country where levels of home ownership are almost half that of Australia. Switzerland is a wealthy nation of renters. In light of housing affordability being at 22-year lows here in Australia, it might be time to pick up a few tips from the conservative Swiss.
The Swiss share the Great Australian Dream of home ownership. They are just more cool-headed about the cost of realising the dream. At the moment it doesn’t make a whole lot of economic sense for them to buy their own home, despite interest rates that Australians would salivate over. The tax system in Switzerland does not currently favour homeowners, and the rental market is highly regulated, so cost effective, high quality properties and long-term tenancies are the norm. There is also no social stigma attached to renting.
The Swiss like to live well. They love to travel, enjoy owning nice cars and the latest gadgets. Mortgages eat into their disposable incomes. And it can also take some time to save the 20 per cent minimum deposit required by Swiss banks, in contrast with Australia’s paltry 5 per cent requirement. Since the early 90s the Swiss government has offered guarantees to buyers that don’t have a 20 per cent deposit; demand for these has been almost non-existent. It appears the Swiss don’t like to commit to a mortgage that they are not in a position to afford comfortably.
The sales pitch was great, but the company fell apart
Invest in real estate. Make money. Improve neighborhoods.
That was the pitch, and it usually started with a ride.
Cary McEntee would be at the wheel, steering his black Cadillac Escalade through some of Hampton Roads’ poorest neighborhoods. His brother, Jacques, usually rode shotgun.
Potential investors rode in the back, watching houses pass by in Norfolk, Portsmouth and Newport News as the brothers kept up a dizzying banter, finishing one another’s sentences, extolling the can’t-fail promise of a red-hot housing market.
This Is the Sound of a Bubble Bursting
Two years ago, when Eric Feichthaler was elected mayor of this palm-fringed, middle-class city, he figured on spending a lot of time at ribbon-cuttings. Tens of thousands of people had moved here in recent years, turning musty flatlands into a grid of ranch homes painted in vibrant Sun Belt hues: lime green, apricot and canary yellow.
Mr. Feichthaler was keen to build a new high school. He hoped to widen roads and extend the reach of the sewage system, limiting pollution from leaky septic tanks. He wanted to add parks.
Now, most of his visions have shrunk. The real estate frenzy that once filled public coffers with property taxes has over the last two years given way to a devastating bust. Rather than christening new facilities, the mayor finds himself picking through the wreckage of speculative excess and broken dreams.
Last month, the city eliminated 18 building inspector jobs and 20 other positions within its Department of Community Development. They were no longer needed because construction has all but ceased. The city recently hired a landscaping company to cut overgrown lawns surrounding hundreds of abandoned homes.
The Bush administration is pushing its plan to help subprime borrowers whose loans are due to reset to higher interest rates next year. But left out of the mix are hundreds of thousands of borrowers with good credit who could face sharp increases in their payments.
These homeowners could be the next wave of trouble for the mortgage industry. They took out what are known as option adjustable-rate mortgages, or option ARMs, which give borrowers a choice about how much to pay back each month. If they choose to make only the minimum payment on a regular basis, their loan balance can actually rise.
That is particularly a problem when home prices are falling. Borrowers who get in too far over their heads may not be able to refinance their loans or sell their houses for enough money to pay the loans back. The result, some economists say, may be another spike in foreclosures.
Cramping My Style [New York City]
Manhattan residents are making an average of $147,000 this year, according to the U.S. Bureau of Labor Statistics. That might sound like a big number, but try owning a $1 million apartment or renting a threebedroom apartment on that salary.
While we hear plenty of stories about hedge-fund kings and Brangelina types roosting in ultra-deluxe pads as big as airline hangars, Manhattan real estate is often a story about regular folks struggling to stay in the city.
With families growing (one out of every 20 Manhattan residents is now under age 5 – up more than 25 percent from 2000, according to U.S. Census .gures) and the price of apartments rising (Citi Habitats reports that threebedroom Manhattan rentals averaged $4,910 in the third quarter), something’s gotta give – and usually that something is space.