In article <66624jF2huimiU1@[EMAIL PROTECTED]
>,
Stan R <aus086@[EMAIL PROTECTED]
> wrote:
> So how are the US-based correspondents coping with this?
>
> Both Charlie Cross and George Zimek live in California, which seems to
> have been not only on the forefront of the green madness, but also
> leading the pack on the residential property bubble.
>
> With $1 trillion of losses now becoming the "accepted" wisdom and with
> literally tens of millions of Americans looking down the barrel of
> negative home equity and the "jingle mail" option looking more
> attractive by the day, how have you guys been affected?
>
> To be honest, Australia has had even more of a property bubble than the
> US and the blow up is only just beginning here - like in the UK & NZ and
> elsewhere. This will be exacerbated by the recent election of a totally
> inept Labor government (in Aus.) and I have no doubt many Australians
> will be in for a rude shock when they discover property in fact does not
> always go up in value, nor are their jobs guaranteed to last forever.
>
> It will certainly be interesting to see how it all develops, given that
> "jingle mail" is not an option for Australians (the banks do have
> recourse to your other assets if your home auction does not cover the
debt).
>
> The word "depression" seems to be gaining traction, however. If/when the
> $145 trillion credit derivative sector blows up, then it's all over and
> anything is possible.
>
> Stress levels at work over the last three or so months do make me look
> wistfully at islands for sale in Tonga/Vanuatu, with no power, no
> Internet and no phones, so as to get away from it all...
>
> Your comments would be welcome.
Personally, the current depression/recession has not affected us. This
is not so much by design, but by luck. We bought our house in 98 for
$217,000. In January 2007 I could have sold it for about $620,000. Now,
if I got $450, I'd consider myself lucky. So some of the equity that
built up, is gone, but that's money we never had so we don't miss it.
But in the height of the borrowing frenzy we nearly jumped on the
bandwagon and made some half hearted moves to speculate in real estate.
In those days, up to early last year, anyone with detectable signs of
life could get a home loan. But, for various reasons, we didn't get into
it and now we are actually thankful we didn't. One of the homes we
almost bought, burned to the ground in last year fires.
Our neighbor is a realtor and she has some horror stories of
bankruptcies, foreclosures and suicides. It appears that Riverside and
San Bernardino counties are most affected. I have a home builder client
in Riverside County who stopped all work on new homes and reduced his
staff to maybe 10 people from about a hundred. In Las Vegas, 50% of
homes that are for sale, are empty - bought by speculators.
I have no illusions. This will not turn overnight. So we hunker down,
spend less and make no extravagant moves. The boat I was going to buy
last year, will not happen. We've raised our fees a bit, gently, not to
start losing clients. Personally, we'll be OK. The super rich in New****t
Beach are not touched by this. Most of middle class will be OK. The
people who will bear the brunt are the lower middle class who
overextended themselves.
The idea of an isolated island sound pretty good.
K
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