This past week, I was talking to a real estate broker about the Open House he had scheduled. After comparing notes about local market conditions, our discussion focused on an article that had been recently published in the Grand Rapids Press about sellers in Grand Rapids, Michigan renting their homes because they were having difficulty selling them. He said, " Lola, this crisis is everywhere. I am doing an Open House today in a home that is in foreclosure and there are a total of 3 in MY neighborhood."
I understood. Not so long ago, forclosures were confined to areas where there was less economic growth. The suburbs seemed insulated from this scourge. Not long ago, brokers debated whether it was appropriate to disclose if there was a financial crisis as that might prejudice the sale against the seller...even if the home was in the 6 month redemption period during which a seller might reclaim some equity if a sale could be generated. Those days now seem to be a long, long, time ago. Now, agents of our local board routinely see notifications in red lettering alterting them to the fact that a particular listing is in foreclosure or will require a short sale to close.
In a recent article by Newsweek magazine, entitled "Poor Among Plenty," authors Peg Tyre & Mathew Philips discuss an increasingly disturbing trend;
"Once prized as a leafy haven from the social ills of urban life, the suburbs are now grappling with a new outbreak of an old problem: poverty. Currently, 38 million Americans live below the poverty line, which the federal government defines as an annual income of $20,000 or less for a family of four. But for the first time in history, more of America's poor are living in the suburbs than the cities-1.2 million more, according to a 2005 survey."
The concerns of the middle class caught in this vice grip are aggravated by a number of factors, not the least being that the "new poor' don't fit the stereoptype of what we have come to expect of the impoverished. They live in nice neighborhoods, have cars and appear to be living normal suburban lives. The suburbs are not places where you find soup kitchens or pawn shops. The new poor are often living right alongside their affluent neighbors.
Increasingly, folks with good manufacturing jobs in West Michigan are finding that it no longer takes 2 jobs to make it, you might be required to have three or four to keep your head above water. It is no longer uncommon to meet with someone and have them share that they are in deep financial crisis. One of my clients recently asked me a rhetorical question, she said " Lola, how can 2 people working 2 jobs not be able to keep their house?" It's a question that doesn't have any simple answers.
Read Part 2 of The Tipping Point...Coping with Crisis....
© Audu Real Estate 2007 All rights reserved
Lola Audu, is the Designated Broker & Owner of Audu Real Estate. Our company specializes in helping people buy and sell homes in the greater Grand Rapids, West Michigan area. We've had the privilege of helping hundreds of clients succeed in their goals of purchasing and selling property including demonstrated success in the negotiation of Short Sale Transactions. You can contact us via e-mail @ info@auduhomes.com or by phone at 616-791-0511.
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Hi Lola,
You're right, it's by no means a city issue at all and it's not a new issue in the burbs either. Maybe not expected, although not new.
As a state director for CAR (CA AOR) in the early-mid 90's we had a rep from HUD at one session. He said some people at HUD had nightmares about getting the entire cities of ________ and of _________ back in forclosure! No need to really name those cities right now, but it was definitely the burbs in So. Cal. Primarily areas where we had a great deal of growth.
In addition at that time even in good ole' Orange County 20% of our sales were either short-sales or reo properties. None of us are bullet-proof.
Thanks for the great post!