The Real Estate Boom
I’m hoping for a real estate boom. Boom as in the sound of something blowing up and disintegrating.
Real estate is one of those businesses most folks view as benign. Even beneficial. But in my mind, it’s anything but benign. It ranks right up there with the worst in corporate greed, probably not far behind those stellar examples of humanity, oil and “defense” contractors.
When is the last time we used our mighty technology to defend Turtle Island?
The profits are often excessive, as evidenced in my own community by the Rolls Royce automobiles driven by at least one of the principles of the largest firm in town, Crye-Leike. One of their top producing agents, Judy McLellan, damn near ran me down the other day in her new, white Mercedes while barreling down Poplar Ave. about 60MPH.
Judy, if you’re going to drive like a self-absorbed maniac in your Merc, you might consider dropping the vanity plate with your name on it.
Top agents like Judy make well into the six figures, some topping $1 million. Or so I’m told by their peers.
Where does it come from?
They make their money from constantly increasing home values and environmentally destructive and unsustainable development. It’s a seemingly never ending cycle where the values must increase ad infinitum, because once it stops, and it must stop at some point, the bubble bursts. Fewer people will sell, and when fewer people sell or buy, the agents make less. Therefore, they want the exact opposite to happen. They want prices to soar and keep soaring. Expand the market. Cash the checks.
What’s wrong with the value of your home going up? Isn’t everyone getting wealthier? Isn’t that the American dream?
No, not exactly.
Because of price escalation, many people can’t afford to buy in good areas and are forced to remain in bad communities with high crime and bad schools. I once had a woman tell me that the key to keeping certain types of folks out of your community was to keep the prices so high they couldn’t afford to move in.
That’s nice.
And who are these “undesirables?” Blacks? Mexicans? Unwed mothers? Liberals? People that won’t spray their yards with chemicals? I can understand not wanting a child molester in your midst, but something tells me that this sort of comment is reserved for people that are sucking hind tit in the not-always-so-fair world of capitalism.
To buy a decent, family home just about anywhere, you can count on paying at least $175,000 and probably $250,000. That means even with a decent down payment, say around $50,000 (which most people don’t have), you’ll have a 30 year note over $1000 per month.
The logic, of course, is that you’ll buy a “starter” (I hate that term) home, make a profit and apply that profit to your next purchase. That purchase is supposed to be an even larger, completely unsustainable home.
And while all of this is happening, the real estate agents are depositing larger and larger checks into the bank.
Growth in new home sales means more development, more sprawl and more damage to habitat. Since new housing starts are what is known as a key economic indicator, there’s pressure in our economy to build new homes ad infinitum, which is absolutely insane, since you cannot grow infinitely in a world of finite resources.
But no one apparently gives a shit as long as the profits keep plopping into the piggy.
Another aspect of all of this is what happens to communities. People don’t stay long. On average, I’d say about seven years, then they’re encouraged to sell and buy a new home. Better hurry before your home loses value! No one knows their neighbors for very long and home is never your “home.” It’s just transient occupancy.
And what’s with all this ego mania? Glamor shots on bus stops, magazine ads, billboards. It’s absurd! Why does every business these days feel the need to plaster photos of their employees everywhere? Could it be not only ego driven, but some sort of weird, outward sign that says “Hey, we’re just like you! White, conservative, normal folks. Do business with us.” Whatever happened to modesty?
A lot of businesses in Memphis put the Ichthus fish, that Greek Jesus symbol, on their signs and business cards, so you will KNOW they’re like you. They believe you should only do business with Christians. Believe me, atheism is bad for business.
When I see those photos, I think “insecure, ego maniac and boring as hell.” Complete dork. Goofball. A total tool.
What’s behind this scathing indictment of real estate agents? I’d like to move. I’d like to move somewhere with a few acres, a decent, energy efficient home and a good water source. Browsing through the ads in the places I’m interested in (southwest Colorado, northern New Mexico, maybe eastern North Carolina or northern Arizona) I quickly discovered I needed more money. A lot more money. Sure, I could move to any number of cities in these areas and get a two bedroom box jammed right next to someone else’s two bedroom box for $250,000. I could listen to the sounds of cars and loud music, not see the stars because of the city lights and hear sirens at 3:00 AM.
Or, I could move outside the city to a reasonable patch of land and hear birds, watch the bats and actually see the stars at night. But to do that, to live a decent life, I have to overcome human greed and the real estate industry. I need $500,000 to $1,000,000.
So, maybe I stay put, because one of the things that can be done to combat this insanity is to stop buying houses. Rent. Renters catch a lot of undeserved flack, but renting actually makes a lot of sense for some people. If you get a decent landlord. There’s no maintenance, no taxes, and you don’t have to worry about selling when you want to move. You just move, like humans did for thousands of years.
If you’re one of those people that whispers about “the renters” in your neighborhood, I’d suggest you not do it around me. Take your lank, pathetic language back to your swanky enclave and keep it there. I can’t stand snobs and bullies, and I’ll make sure you know.
Gary Snyder suggested in Turtle Island, his Pulitzer Prize winning 1969 collection of poetry and essays, that if we would all stop buying cars for one year (I think that was it), the automobile industry would collapse. If only we had listened!
And as Snyder, Abbey and others have ceaselessly pointed out, a continually growing economy is not healthy. It’s a cancer, and as Snyder states in Turtle Island, the waste that is allowed to occur so profits can expand is criminal.
I’m suggesting everyone not buy a house for a year. Two years. That will stop this insanity and bring prices back to fair levels. An even playing field where a single mom working two jobs can afford a decent home in a decent area. And no, I don’t give a hoot about your balance sheet. It’s soft dollars. What’s more important is a family having a decent place to live without having to worry about foreclosure.
Which brings me to another issue. Banks.
More on that later.
Yah, if boom is a cancer, they’re a carcinogen. My friend wrote a blog about them, he’s a bit sarcastic in his views. I wrote about growth real quick the other day. My friend said that we needed to get into “green business” I told him the only green business I was into was not consuming so much shit. I don’t know what it is about the idea of the economy but they can’t get the idea through their skulls that an economy based on growth is bad for the environment. You can read what I briefly said on my blog, in the meantime check out my friends blog about real estate… http://apachepilgrims.blogspot.com/2007/07/real-estate-for-sale.html
Oh and for gOD sakes don’t move to eastern North Carolina, there’s already enough of us here.
Funny. I hadn’t even read your blog, but our posts were damn near right along the same lines. That’s a good sign.
Western Carolina. I wrote Eastern but meant Western, an area I know well.
I’ll skip over and read your friend’s post, but you’re right. The greenest business is no business. At least “less business.”
$250,000 for a house? Chicken feed.
Here on the coast of Monterey Bay, the median home price is $750,000 for a modest one or even more modest two bedroom home. Houses regularly sell for over a million dollars. Just a quarter mile from where I sit are four new million dollar homes that will sell before the end of the year.
Disgusting!
I was listening to a program on the radio the other day about the housing downturn and the guest said that for a long time the rule of thumb was you should buy a house that you couldn’t afford because your income would grow into it. You can just imagine all of these realtors urging potential buyers to go ahead, you’ll be able to afford it in a few years. Its got to be some kind of criminal misrepresentation.
Also, I was talking to my mother in law because they were thinking of moving into a smaller, ranch style home because the old family home is too big now. They live in rural WI and were looking for something that was on a plot of land similar to what they were on. We both lamented the trend to build half a million or million dollar homes on old farm properties. It seems that if you are looking to get on to a small farm you have to be willing to buy a ridiculously big house with a 4 and 5 car garage to do it. One more obstacle to moving to a more local, decentralized economy: make small farms unaffordable to those who would actually farm on them.
For god’s sake, don’t look into western north carolina. I’m leaving here in a week – just can’t take it anymore. Beautiful county, being destroyed by subdivision after subdivision of mcmansions – more people than the infrastructure can support – and city and town councils preaching the “growth is good” mantra. Should I stay? Grin and bear it? It’s just impossible. I I stay, I go crazy. If I leave, I become part of the problem somewhere else. Magazines and their “10 Best Places to Live” issues ought to be outlawed.
Yeah, yeah. I know. I agree.
When I lived in Knoxville, I used to think about heading over into the hills not far from Boone. My wife still longs for the place, but I really don’t.
Your point about staying or becoming part of the problem elsewhere is well made. I have the same issues. One of my friends in southern Arizona tells me that it might as well be me because someone else will certainly come regardless. And, I’d be a different type of immigrant, one that would be looking for the smallest, oldest, existing spread I could find. That, and a bunch of land I could buy and protect.
I wish I was filthy rich so I could buy a bunch of land designated for development and then just burn the signs announcing the new subdivision to the ground. But I guess I’d have to do some bad shit to get filthy rich and have all of that on my mind.
Land and a yurt.