False-Bottom Blues
With the first phase of the real estate decline seemingly over, HuffPost's Evelyn Nieves feels confident using the past tense while writing prose poetry about the decline in Stockton, California:
The heart of Foreclosureville, U.S.A. – the Stockton subdivision that had more bank repossessions than any other place in the country for much of the last two years – is starting to look like its old self again.
The "For Sale" signs that overwhelmed Weston Ranch are mostly gone, and the lawns where weeds grew like corn stalks are shorn.
Foreclosure businesses that sprang up, including one that spray-painted brown lawns green and another that offered a foreclosure bus tour, have folded. Every time a foreclosure hits the market, bargain hunters snap it up.
But looks are deceiving. In Weston Ranch, financial devastation struck like a natural disaster and the ground has not yet settled. Speculators are buying houses to rent out. On streets where everyone knew everyone, no one knows anyone.
Your receptivity to this stuff will vary with your fondness for more-truthy-than-exacting literature. While Nieves refers to a "decimated" community, Stockton's peak foreclosure rate of 9.5 percent doesn't even meet the pedant's modest definition of "decimate" -- to reduce by a tenth. To call buyers in today's market "bargain hunters" also presupposes that today's prices are bargains, though the preponderance of evidence suggests California real estate remains overvalued. And a person who buys a house to rent out is not a "speculator." The proper term for that person is either "landlady" or "male landlady."
But I'm trying to be more upbeat, so I'll say I enjoyed Nieves article and found it positively Vonnegut-esque. And also note that even in the heart of Deadbeatville, houses sell when you price them closer to what they're worth.
Courtesy of Calculated Risk.
