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Real Estate Nightmare in FL

chicago dyke's picture

My grandparents were amazing people. Despite racism and poverty, they managed to retire in wealth and comfort, because they beat the odds and worked the system and carved out a very profitable little real estate empire in the latter halves of their lives. Beginning when I was 12, I got sent to live and work with them in the summers, the better to learn about "the value of the dollar" and "where money comes from" and other wholesome lessons. It worked. I learned over those summers that "business" in America means one must at all times be on guard for lying, thieving, stealing, misreprestation and demonic evil. Sometimes, I wish I had my grandfather's mettle; I left the business and went off to college to study things that didn't make me feel so "icky," which is always how I feel in a sales position. But it turns out he was right and I was wrong; if I'd skipped college and taken over the business, I'd be rich and powerful enough to buy me some politicians, instead of poor and with a head stuffed with pretty words and dates in history that no politician seems to be able to hear.

Anyway, this post from a blog that's new to me really brought back the real estate nightmares every salesperson has had:

This year's lowest-priced house was not listed as a foreclosure but had "real fixer upper" handwritten on the flier. In our minds, regardless of the actual listing, this house was effectively a foreclosure. It was $340K for a 4/3/2 with hot tub in 2,935 square feet ($116 per SqFt) built in 1993, sold "as is, with right to inspect." The multiple mud dauber wasp nests near the front door, the emerald green décor and warped wood flooring inside accompanied by the green-water hot tub on the back porch made it clear this house had empty for awhile.

The next-cheapest house was listed at $384K for a 5/3/2 and pool with 2748 square feet ($140 per SqFt) and an admitted foreclosure. The front door was actually unlocked. There were bed frames, a child's coat and stuffed animal, business cards, PC printers, etc. strewn across the house. If the person whose card was scattered all around the house and garage was the previous owner, it was a real estate agent! (Or maybe now an ex-Real estate agent?)

My family real estate biz was in Detroit. The D is often the butt of jokes; no one can feel bad about their town so long as Detroit still holds the honor of being the "worst place to live in America." It isn't, but it is true that if you wanted to see what happens when large numbers of people abandon formerly middle-class neighborhoods, Detroit is a great place to go.

Back in my real estate days, Detroit was at a real low point, even for it. People were always telling Grandpa about how properties under his control (he managed many for the government) were being vandalized by crackheads, burned out by "Devil's Night" pyros, filled the squatting prostitutes...and that was so often the case that Grandpa had no problem getting approved for a concealed-carry permit. We never visited those properties without a gun. Did you know that there (was then and is today) a flourishing trade in precious metals, stripped out from abandoned homes by people who then truck them to recycling facilities for the cash? The copper pipes and suchlike can mean real money if you're poor but not afraid to use your hands.

Now, I'm not saying I expect all these imploding McMansion 'hoods to turn into...well, real "hoods." But I am in agreement with Our Lord Atrios, who has been trying really hard to get his econ and finance friends to understand that even "decent" people will have no problem walking away from "upsidedown" mortgages if things seem bad enough to them. Somewhere in Detroit, people are laughing and laughing and laughing...

Be sure to at least skim the comments for that link. Clearly, there is a HUGE divide in understanding, between people like me (those who know what Hard Choices are to be made when poverty threatens) and those who live in a fantasy world, in which the "shame" of bankruptcy and turning in the keys keeps people paying their bills. Hint for the still wealthy: it won't.

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Submitted by lambert on

and retreated to gated communities with their loot.

Why would they expect anyone else to act differently?

If the game is rigged, why not kick over the board?

[x] Any (D) in the general. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.

don't think the average joe won't eventually make the bottom line decision to walk away from an investment going south.

Sure, for a while they could 'rent' a great home 'worth' much more than their teaser mortgage payment, but now that the payment's going up and the value is going down...

Why would they keep the house worth so much less than the mortgage?