So you’ll know, the majority of this blog is written between 6:15 and 7:00 AM, while I’m making breakfast and getting the day lined up. We’ve got new neighbors in Carlos’ old place. They are Latino and keep entirely to themselves. But once one such family moves into the neighborhood, it is time to move out.[Author's note 2015-09-25: By five years later, the entire north side along the casino fence was occupied by Latino renters. I don't know any of them, but I see the police called out to that street two or three times a month. And that's just what I see. I'm not suggesting anything, I'm reporting what I predicted and what I saw. According to some sources, this means the police have nothing better to do than persecute minorities.]
Which reminds me, Carlos has vanished into the Florida void. No, not the Everglades but the construction industry. That’s where you wake up one day and zing, you are 50 years old and no matter how you slice it, still in the construction industry. In fact, the only construction person I know is Wallace and he got out of it years ago.
[Author's note 2015-09-25: I had not yet heard the term "underwater mortgage", or possibly it had not yet been coined. It is easy in a credit society for people to be broke without realizing it.]
In a some-time habit, I look at real estate on Fridays. It is still scary out there. The advertising has continued along like there is nothing wrong. Nonsense, not only are people leaving Florida because there are no jobs that pay enough to buy a house here, but I suspect that proportionately more people die every day in this State. Prices have not yet begun to drop if you ask me. Oddly, one of the few places with stable home prices is this very neighborhood. Court living is again proving that it is the only way left to beat the Florida system.
The term used for “losers” in real estate is “negative equity”. This is where the buyer owes more on the property than it is worth. It affects around one property in four in the US and around four out of five (if the truth were known) in Florida. Some talk is that a bailout will allow people to refinance at the lower value, but that will not work—even the prices are still vastly inflated. Admitting the price has dropped will cause neighboring properties to drop, just like they all once climbed at the same time.
My comment concerns not the borrowers, but the lenders. American accounting law allows accounts receivable to be listed as current assets. In reality, that money is no more secure than the ability of people to repay it. Thus, billions of dollars of rock solid companies are really worthless loans. Sooner or later, these big shots are going to have to re-evaluate back to reality. And it is already later.
Of course, none of this in any way concerns those who don’t owe any money. Those who planned ahead and know how to live within their means need not even be concerned about real estate prices. But I like to watch prices anyway, remember I promised Wallace to keep an eye out and don’t be surprised if one day soon that seashore cottage is a reality.
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