Empty homes a symbol of pain, economic and otherwise
You think you get it. You read the headlines, you follow the economic reports — unemployment above 10 percent in Georgia, foreclosures rising, retail sales stagnant. You also hear the stories of frustration told by friends, neighbors and relatives. So you think you’ve come to grips with just how dramatically things have changed.
Then you see something you hadn’t noticed before, and once again you realize that this transformation is more profound than statistics and headlines can communicate.
Personally, I had grown used to driving down a prosperous in-town street and seeing a dozen for-sale signs in less than a mile. In other parts of town, where the real-estate boom never really took off, it’s been common for months to see several homes on each block with boarded-up doors and windows, foreclosure signs in the front yard disappearing behind high grass and weeds.
But visiting a high-end gated golf community in the northern suburbs of Atlanta this weekend, it was sobering to see the same phenomenon on a different scale — empty house after empty house, proud mansions of brick and stucco with no cars in the driveway, no grills on the back porch, no balls in the yard, no sign of human activity at all.
Abandoned mansions — there’s something about that image that grabs your attention.
Most of the houses were 5,000 square feet at a minimum; many were new enough that they had probably never been occupied. So developers and banks, which in some cases means taxpayers, had been forced to eat the loss. Others, however, had been dream homes to families that had been forced to pack up and leave that dream behind.
According to Zillow.com, the phenomenon is national in scale and growing. Three years ago, high-end housing accounted for just 16 percent of total foreclosures, writes Stan Humphries, chief economist at Zillow. Back then, the problem was concentrated at the cheaper end of the market, which accounted for almost 55 percent of foreclosures. Homes in the middle one-third of home values made up almost 29% of foreclosures.
But by July 2009, the most recent data available, the numbers had become “shocking.”
“Thirty percent of foreclosures are homes in the top tier of local home values,” Humphries writes. “That means that top-tier homes make up almost twice the proportion of foreclosures as they did just three years ago.”
We talk a lot about the economic and political impact of the Great Recession, and for good reason. But it’s the psychological impact on millions of individuals, the fear and humiliation, that is likely to linger from all this.
No, it won’t have the generation-defining impact of the Great Depression. But like the Depression, this recession shows no sign of being temporary. The dislocation and redefining of goals are long term and massive in scale.
At the moment, stories of recession-related suicides and divorce are still just anecdotal; the data collection systems haven’t caught up to reality. But at every economic level, abandoned houses represent abandoned dreams; they symbolize lost security and futures that may never be realized.
In the good times, we as a culture bought easily into the idea that self-worth could be measured by financial worth. The size of your home, the make of your car and the school where you sent your children told the world something important about you. People arranged their lives around that understanding.
That mind set doesn’t disappear easily. Successful people proud to have provided well for themselves and their families suddenly find themselves unable to do so, and the discovery is wrenching. They tell themselves they haven’t changed, the world did, and they’re right. But in their hearts, their perception of themselves and their place in the world has changed forever.
I don’t know — maybe I’m reading too much into it. But it seems to me that empty houses aren’t really empty at all. You can peer into the windows, at the abandoned, darkened rooms, and see things that used to be. And you can see pain and trouble for people to whom economic loss is the least painful loss of all.
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180 comments Add your comment
I Report/ Vast White Wing Conspirator (-: You Whine )-:
October 13th, 2009
8:02 am
Can it be anymore obvious what the libs desire for America, a diminished standard of living, a weakened economy and the end of the dollar’s dominance abroad?
You know, all those things they whined about while Bush was in power and no such conditions existed?
Can you not sense the longing and passionate lust and absolute happiness and sense of upmanship that bookman feels towards the successful, the very people that drive the engine of prosperity, and most of all, buy the product and advertising that allows him to pontificate with such abandon?
Is it not so utterly bizzare?
I Report (-: You Whine )-: O Stands For Zero
October 13th, 2009
8:03 am
Ooops, forgot the new name, busy this morning.
Night Train
October 13th, 2009
8:04 am
I do not feel sorry for anyone who lost their home when they were living well beyond their means. You want to look like a big shot and live in a 5000sq.ft. home and drive a high-end car while making 30k/yr. They earned the fate they received.
TnGelding
October 13th, 2009
8:13 am
I Report/ Vast White Wing Conspirator (-: You Whine )-:
October 13th, 2009
8:02 am
We pretty much picked this apart below. Zero is a hero!
I Report (-: You Whine )-: O Stands For Zero
October 13th, 2009
8:14 am
It would do you libs some good to check the unemployment rate for the young, poor and minorities to see that “trickle down” does actually work.
Your greedy, pathetic war on the prosperity, especially considering the average net worth of the goon politicians waging it, is absolutely hammering those that you profess to want to help.
Unless, of course, you lie.
Peadawg
October 13th, 2009
8:15 am
“I do not feel sorry for anyone who lost their home when they were living well beyond their means. You want to look like a big shot and live in a 5000sq.ft. home and drive a high-end car while making 30k/yr. They earned the fate they received.”
And now they expect Obama to bail them out..
Shawny
October 13th, 2009
8:17 am
ditto what nighttrain said. over extended poor planning on their part does not necessitate a crisis, nor is it reason to extend a bailout.
TnGelding
October 13th, 2009
8:22 am
Night Train
October 13th, 2009
8:04 am
You’ve got a point. The consumer does own some responsibility, but many were duped. We’ve got to do a better job of teaching homec.
Brad Steel
October 13th, 2009
8:23 am
Whiner,
Are you talking about the haters who clapped and rejoiced when the US lost the Olympic bid or the arrogant loudmouths, like yourself, who screech “I HOPE HE FAILS!” Or are you referring to the derision hurled at the president, the EU, and the rest the world about a peace prize? It’s prize for peace for god’s sake. The haters now even hate peace.
Why must you hate so much? Why do you hate America? Why do you spend so much time eagerly wait to show your 1st post hate for Op-Ed columnist?
Now, you can go back to hating.
TnGelding
October 13th, 2009
8:25 am
I Report (-: You Whine )-: O Stands For Zero
October 13th, 2009
8:14 am
Looks like a lot of the tax cuts and unclaimed income trickled into off-shore tax havens. Once the freefall stops, the economy will gush up, like it always does after a Republican greed orgy.
FinnMcCool
October 13th, 2009
8:27 am
So the liberals caused the middle-upper and upper classes to lose everything and those losses trickled down to the poor, minorities, and the young people who are now unemployed?
You are hopeless.
Mrs. Godzilla
October 13th, 2009
8:28 am
Glad to see compassionate conservatism so well represented.
Finn’s right. Hopeless.
Doggone/GA
October 13th, 2009
8:28 am
I have even less sympathy for the real estate speculators who contracted to build those 5000 – 8000 sq. foot homes BEFORE they even HAD a buyer, then couldn’t sell them. The same speculators who priced the average Jane & Joe out of the market, because they weren’t building homes J & J could afford. And I have zero sympathy for the loan companies who lied to persuade J & J they COULD afford a big house on their average level income.
cas
October 13th, 2009
8:30 am
In some cases it may actually be people overextending themselves but for most of those living well within their means to wake up to a loss of their job or business and give up their homes is a symbol of todays pain. More so these were the people supporting our economy by buying things others made or served. You have to wonder how many dollars go unspent and how many other jobs lost are represented by each of those vacant high end homes. And most of them didn’t want an Obama bailout but simply the Obama leadership nowhere to be found..
I Report (-: You Whine )-: O Stands For Zero
October 13th, 2009
8:31 am
The AHIP study also illuminates the other taxes and regulations that will increase insurance costs and weren’t part of the bargain. The 40% excise tax on “Cadillac” health plans—above $8,000 for individuals and $21,000 for families—is structured so that it will ultimately hit the Chevy plans too, much like the alternative minimum tax. Reductions in Medicare payments mean that doctors and hospitals will be forced to raise prices in the private market, which will cause a 1.2% increase in the underlying health costs that drive premiums.-WSJ
This whole rotten scheme is good for no one except for the democrat politicians hell bent on wrecking the US economy.
Enemies of the state, all of them.
Taxpayer
October 13th, 2009
8:32 am
Whiner is just upholding his namesake, Brad. Nothing more.
FinnMcCool
October 13th, 2009
8:32 am
Look at your 401k’s, folks. That money didn’t disappear. It was swept into the accounts of those who work (or hire those who work, ie hedge funds, etc.) on Wall Street.
This was collective, legal, theft of the middle classes. And when they had bled the middle class dry, they went after the upper class. That’s where we stand now.
Matt Tiabbi at Rolling Stone can explain it much better than I can. Well worth the read.
TnGelding
October 13th, 2009
8:34 am
Jay, don’t you know all those poor folks that took advantage of the CRA just returned to the ghettos?
We needed to become more frugal, but it’s a shame it had to be forced on us. The human toll will be everlasting in many cases. But most will recover, eventually, and be the better and wiser for it.
Mrs. Godzilla
October 13th, 2009
8:35 am
ANdy
AHIP report was a threat. Screw ‘em.
FinnMcCool
October 13th, 2009
8:36 am
Cas is right, those who lived in those homes Jay described were probably fairly high up in management at their companies or ran their own businesses. If their businesses failed or they were laid off then those who worked for them were probably also out too.
Gale
October 13th, 2009
8:40 am
Doggone @8:28, right on the mark. The problem at the high end was less duped consumer than greedy speculators who walked away. They may or may not have been burned. I am sure in their minds, they were burned; they failed to gain the millions they expected.
Scooter
October 13th, 2009
8:40 am
Look at your 401k’s, folks. That money didn’t disappear. It was swept into the accounts of those who work (or hire those who work, ie hedge funds, etc.) on Wall Street.
Thanks Finn, I knew someone got my money!
Taxpayer
October 13th, 2009
8:41 am
Republican greed orgy.
A Republican creed.
We do it with greenback,
We do it with gold,
We do it to both young and old.
We just do as we’ve always been told.
Do unto others before they do unto you.
hehehe
Normal
October 13th, 2009
8:43 am
Howdy Whiner, your: Can you not sense the longing and passionate lust and absolute happiness and sense of upmanship that bookman feels towards the successful, the very people that drive the engine of prosperity, and most of all, buy the product and advertising that allows him to pontificate with such abandon?
I don’t know Whiner, and it’s probably a chartacter defiecency on
my part, but I have a hard time feeling sorry for a billionaire who have suddenly become a multi-millionaire.
Gale
October 13th, 2009
8:43 am
Enforced frugality is good for us. I’ve gone through several periods of unpleasant belt-tightening. But I think it made me wiser in the long run. I sincerely hope I won’t need another lesson. I never went hungry or homeless and I really don’t want to.
FinnMcCool
October 13th, 2009
8:46 am
And if you don’t think the workers (upper-middle, middle, lower) of this country aren’t getting shafted I have three words for you: Defined Contribution Plan.
Pensions are Defined Benefit Plans. This is a plan in which the benefit on retirement is determined by a set formula, rather than depending on investment returns.
In a Defined Contribution Plan, contributions are paid into an individual account for each member. The contributions are invested, for example in the stock market.
Investment Returns is the kicker here. Before the popularity of Defined Benefit Contribution plans, people knew exactly how much money they would have in retirement to live on. Now, every penny you or your employer puts into the plan is at the mercy of the greedy wall street bankers who can wipe you out in a heartbeat.
And don’t tell me “oh, well it’s the employers money anyway”, no, it’s not. This is what is called Deferred Compensation which is part of your pay package.
Those who were set to retire last year, this year, or over the next 3 years. What in the heck are they supposed to do with a 401k that has just been wiped out?
lovelyliz
October 13th, 2009
8:47 am
Try looking for a “modest” home built in the last 10 years. I a lot of areas where people have to live and work, they don’t exist because builders won’t build them. They concentrated EVERYTHING into mega-mansions and high end condos.
Bosch
October 13th, 2009
8:47 am
“You want to look like a big shot and live in a 5000sq.ft. home and drive a high-end car while making 30k/yr.”
Everything fits so little and tight in the mind of a wingnut. To those who believe such hooey. They have to blame all this on someone, and it is so much easier to blame it on the working poor, just like it is so much easier to blame social problems on the poor poor. Yes, ^^ that is the problem, the only problem – that’s exactly what happened. It had nothing to do with this:
“I have even less sympathy for the real estate speculators who contracted to build those 5000 – 8000 sq. foot homes BEFORE they even HAD a buyer, then couldn’t sell them.”
Oh, no, it couldn’t have because (gasp!) that would be a strike on the (gasp!) free market!
lovelyliz
October 13th, 2009
8:49 am
Well FinnMcCool the neo-cons would tell you to just get a job.
Doggone/GA
October 13th, 2009
8:51 am
“What in the heck are they supposed to do with a 401k that has just been wiped out?”
The same thing you “do” with a “regular” retirement benefit that was wiped out in bankruptcy proceedings…or that just disappeared because the company went under.
Gale
October 13th, 2009
8:51 am
Too true lovely liz. I have been looking for a home less than ten years old and less then 2000 sqft on one floor and there are none to be had, not even if I take on a long commute. My other option is to build and the property within my acceptable commute is very expensive.
Bosch
October 13th, 2009
8:52 am
lovelyliz,
Good point. I wonder if it’s possible to find a house built in the last 10 years that wasn’t in a subdivision called “Wondering Pines” or “Oak River” or “Whispering Willow” or some bs name like that.
Bosch
October 13th, 2009
8:53 am
Gale,
I wouldn’t dream of buying a house that was under 10 years old because it’s made out of sawdust and will disintegrate in the next 10 years.
Scooter
October 13th, 2009
8:54 am
I don’t know Whiner, and it’s probably a chartacter defiecency on
my part, but I have a hard time feeling sorry for a billionaire who have suddenly become a multi-millionaire.
Good morning Normal. You said a mouthful there Brother!
So did you Finn.
Taxpayer
October 13th, 2009
8:56 am
Why do you think Georgia is number one in bank failures. They freely dumped money into the hands of the developers and their fields of dreams and they accepted those overpriced rows of abandoned homes and promises of more to come as collateral. We’re all paying for those losses via the FDIC and the monies that they must extract from those banks that are still standing. (Of course, that is a very small part of the total price that we are paying but that’s another story.) It’s the Republican way and all the winner needs now is a little sympathy in the form of a tax break. Armey of teabaggers, anyone.
Doggone/GA
October 13th, 2009
8:56 am
“Oh, no, it couldn’t have because (gasp!) that would be a strike on the (gasp!) free market!”
Just think what speculators are missing out on. If they’d go back to building affordable, middle-income housing they’d made a FORTUNE. They might not make such a big profit as they would on a bigger house, but those middle-income houses would SELL. You can’t make a profit if the house just sits there unsold.
godless heathen
October 13th, 2009
8:56 am
In recent years I would drive past huge new home after huge new home and wonder how that many people could afford that many big new houses. Apparently they couldn’t.
Gale
October 13th, 2009
8:57 am
You have a point, Bosch. However, some of the composite building products are better quality than the “real” wood available today. When’s the last time you went looking for a bunch of straight 2×4s ? Slowing down the residential construction industry might bring some standards back into play. The down side of an older home is the remodel potential. Having remodeled my own kitchen, I am not eager to do it again. But I have been spoiled by what I have now, which is not high-end by any streatch.
Fly-On-The-Wall
October 13th, 2009
8:59 am
Unbridled speculation is the scurge of capitalism.
Finn McCool
October 13th, 2009
9:01 am
From Wikipedia:
In a defined contribution plan, investment risk and investment rewards are assumed by each individual/employee/retiree and not by the sponsor/employer. In addition, participants do not necessarily purchase annuities with their savings upon retirement, and bear the risk of outliving their assets.
The “cost” of a defined contribution plan is readily calculated, but the benefit from a defined contribution plan depends upon the account balance at the time an employee is looking to use the assets. So, for this arrangement, the contribution is known but the benefit is unknown.
So…..
Employers have shifted all the risk to the employees. So, everything is hunky dory as long as the stock market is doing well and the average investor is protected by systems put in place to limit legalized theft on Wall Street. Yeah, right. We are screwed from the get-go.
stands for decibels
October 13th, 2009
9:05 am
Don’t really have time to address all broader sociological issues Jay has raised in his worth-the-wait column, but there are two more prosaic issues that came to mind.
By Zillow’s reckoning, what’s really happened here is that the upper tier of homeowners are now officially as well-represented among the foreclosed as the middle and lower tiers, nothing more or less. This comes as little surprise to those of us who’ve been following the trends, although sociologically of course it’s of interest.
However–what did surprise me was this factoid, tucked in at the end of the piece Jay had linked:
At the end of Q209, Zillow estimated 23% of single-family homes are underwater on their mortgages.
If that’s actually right…Holy cow. Wow. Just wow. How can a society that’s thought of itself as being mobile and flexible carry on when so many are saddled with property that can’t be moved without taking what I’m assuming would be a serious loss?
Again–23 percent under water? That it was that high was news to me. Holy cow.
jt
October 13th, 2009
9:06 am
“Empty homes a symbol of pain, economic and otherwise.”
It is Jay,
Thank God, our congress has alleviated the worst of it by TARP funds. Those bankers were really feeling the pain.
Normal
October 13th, 2009
9:07 am
Good morning Scooter, you keeping dry?
Taxpayer
October 13th, 2009
9:07 am
Doggone/GA
October 13th, 2009
8:51 am
“What in the heck are they supposed to do with a 401k that has just been wiped out?”
The same thing you “do” with a “regular” retirement benefit that was wiped out in bankruptcy proceedings…or that just disappeared because the company went under.
Actually, my retirement benefit is backed by the PBGC. Defined contribution plans have no such protection or guarantees of any standardized form. For example, in hard times, the company simply quits making contributions. Further, if you happened to ‘invest’ your money in stocks or even many bonds, then you likely lost out yet again. Not to worry though, if you put your money in the bank, well, it’s protected up to the new $250,000 limit (until that protection expires and it reverts to $100,000) while it earns nothing, plus or minus whatever.
Bosch
October 13th, 2009
9:08 am
Finn,
“and bear the risk of outliving their assets.”
I would say that is the next big national crisis. We will see more and more elderly homeless people in the next few years because there will be no one to care for them. The elderly require a LOT of care and that care is VERY expensive. The naysayers of health care reform has obviously NO clue about what it takes to care for an elderly person.
danjonglee
October 13th, 2009
9:11 am
I sense a bit of happiness and glee over the 16% real unemployment, forclosures, and misery of fellow Americans………..It can be fixed……but will it….
Angry Black Man
October 13th, 2009
9:12 am
sfd
I found out that I was underwater last April when I tried to refinance. The value was less than $2k underwater, but my appraised value was about $30k less than what my taxes were assessed at. By the time I received a copy of the appraisal, it was too late to contest my tax assessment. Henry Co. will have to make good next year though. I know they will because Republicans love tax cuts.
Taxpayer
October 13th, 2009
9:12 am
Again–23 percent under water? That it was that high was news to me. Holy cow.
I saw slightly higher estimates some time back. Maybe it’s a sign that things are getting better.
Normal
October 13th, 2009
9:15 am
“and bear the risk of outliving their assets.”
This too, is one of my fears. Even though my house and cars are paid for, and I work, what savings I have would not last through a medical emergency or other disaster. I am thinking about converting my upstairs bonus room into a studio apartment for the extra income. It would be a risk to drain some savings for the work, but I don’t know what else to do without trying to sell and severely downsize.
Finn McCool
October 13th, 2009
9:16 am
Bosch wrote: We will see more and more elderly homeless people in the next few years because there will be no one to care for them.
Wasn’t one of the nice side effects of the Social Security system the fact that older folks no longer had to live with their kids? So, you no longer had extended families living in one house so you needed at least two housing units: one for the elderly parents and one for the kid’s family. Now you have a housing market! Well, the housing market lasted for a good 60 years anyway.
oh well. Welcome the granparents into your 4th bedroom in the ghost town of a subdivision called “Whispering Woods” (fitting name!), eh?