On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs." --San Antonio Express-News
A real estate industry group today announced that there was a nine percent jump in foreclosures during the month of May.
RealtyTrac reported that 205,990 U.S. properties received filings last month, including default notices, scheduled auctions and bank repossessions, marking the first monthly increase since January. Bank repossessions climbed steeply, up 7% to 54,844, after hitting a four-year low in April.
The report also noted that foreclosures made up 26% of U.S. home sales in first quarter and that more than 30% of mortgage borrowers were still underwater.
As someone who just moved to Tucson and spent more than six months searching for and finally purchasing a home, I can add a bit of personal experience to these dry statistics. And my perspective is sadly not encouraging.
When we arrived in Tucson in late October, we thought that we would have an easy time finding the right house. We had owned our Maryland house outright, so we didn’t need a bank mortgage to purchase the house in Arizona. Many people had told us that if you have cash, you will be able to get a good deal. Moreover, the housing crisis suggested to us that there would be a lot of good homes to choose from at reasonable prices.
Diane and I however were very picky. We wanted a single story house with more than 2000 square feet and four bedrooms (a master, two offices, and a guest room). In addition, we wanted the house to have a nice view of the mountains, and be located on the western side of Tucson, reasonably close to the interstate highway.
Fortunately, our real estate agent, Don Ernle, was very cooperative, and willing to take us to see as many houses as we wished.
In the end, we looked at more than 150 houses, covering about two thirds of the city of Tucson. From this experience, we gained a very educated personal perspective of the sad state of the housing market.
I would estimate that from one third to half of all the houses we looked at were either foreclosures, short sales, abandoned by their owners, or houses where the owners had stopped paying their mortgage and the bank had simply not yet taken action against them.
Let me repeat that: Almost half of all homes for sale were underwater, the bank losing money on the mortgage.
This situation was also terrible for the housing stock. When a home is in foreclosure or has been abandoned, there is no one to maintain it. Often the bank is out-of-state, making for an absentee owner. The result is that the house begins to decay. Worse, being empty with no one to watch it the house often gets vandalized. It was very typical for these foreclosed homes to have had all of their appliances stolen, with evidence of squatters having lived there. There might be leaks in the ceilings and holes in the walls. Carpets and floors would often be damaged and need replacing.
Thus, you might be able to get a good deal on the house, but you would also have to spend a lot of money fixing it up.
With almost half the homes in this kind of condition it is no wonder home values have been going down.
And going down they were. From December to April we saw a 10 to 25 percent drop in home prices for the type of homes we were looking at. When in early December we finally came to an agreement on the house we wanted, it was priced at $370K. At the time, this was at the low end of the market price for that type of house, making for a good deal.
The house was a short sale, however, and it took the bank four and a half months to finally approve the sale. When we actually settled in late April, that $370K price was now at the high end of the market. Comparable houses in the same neighborhood that had been priced at $400K in December were now selling for $325K to $350K.
We went ahead with the deal anyway, because the house was exactly what we wanted, and we weren’t really buying it for investment. Moreover, it was still a great deal, as the house was only six years old and had originally sold for $630K, meaning that we were getting it for 40% less than its previous value.
Nonetheless, the experience left me very worried about the future state of the U.S. economy, especially when I have read articles about how the banking industry had, for a variety of reasons, not yet released all their foreclosures to the market. When these homes become available at their typically cut-rate prices (as the article above suggests is finally happening now), home values will surely drop again.
In other words, we haven’t yet seen the bottom of the market.
Why are we in this situation? It is very simple. When Congress in the 1990s decided to force banks to give mortgages to people who could not afford them, it created a glut of buyers. A glut of buyers increased demand, which caused a steep but artificial rise in home prices while simultaneously producing a wave of home construction.
When the buyers who couldn’t afford their homes abandoned them in the late 2000s, the result was a glut of homes with no one to buy them. That, combined with the decaying state of the housing stock because so many homes were unoccupied, caused a collapse in home prices.
The key phrase however that really explains this whole sad story, however, is this:
Congress decided to force
With the best of intentions, Congress in the 1990s inserted itself into the market, trying to artificially allow poorer people to become homeowners. Such things don’t work, and in the end, it caused everyone far more pain.
What next? I am no real estate expert. My knowledge here is based on personal experience and what I read from many news sources on the web. However, I expect the housing market to remain weak for at least five more years, as it is going to take at least that long to cycle through these damaged foreclosures and get them rebuilt, sold, and off the market.
In the meantime, the rental market continues to boom. And if you have spare cash and want an investment, real estate is probably a good place to go.
My July fund-raiser for Behind the Black is now over. The support from my readers was unprecedented, making this July campaign the best ever, twice over. What a marvelous way to celebrate the website's tenth anniversary!
Thank you! The number of donations in July, and continuing now at the beginning of August, is too many for me to thank you all personally. Please forgive me by accepting my thank you here, in public, on the website.
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