Essentially, millions of Americans have become frozen in place, researchers say, unable to sell their homes and unsure they would find jobs elsewhere anyway.Go
October 28, 2011
"The continuing economic downturn has drastically altered the internal migration habits of Americans..."
"... turning the flood of migrants into the Sun Belt and out of states like New York, Massachusetts and California into a relative trickle..."
West nowhere, young man.
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Not sure I'm buying this. Recent census data shows an increasing migration from blue states to red states (Midwest and South). Housing is cheaper in those areas and jobs are much more plentiful.
http://www.npr.org/2010/12/23/132234651/census-data-will-reshape-u-s-political-landscape
This, of course, is related to the housing market since many people pay for their new digs with the proceeds from the sale of the old.
Ann Althouse said...
Go West nowhere, young man.
Or old woman.
The Blonde would like to move to a warmer, drier climate, but we'd have to be able to sell the house.
I don't doubt a lot of people are in the same bind.
The can go occupy a city, chant and beat drums until the walls of Wall Street come down.
Sometimes the roots you set down with a house are hard to pull up.
Corporations stopped offering relocation packages years ago, except perhaps for top management.
Is it still possible to get an academic job offer that comes with a relo?
I would have moved a year ago from NJ if I could have sold my house...
You're correct Peter but the Federal government has generous relocation packages for their employees.. and WE PAY IT!
The owners of houses cannot afford to sell them and pay off the mortgage, and if they "let them go back" to the bank, then the credit rating for a new home mortgage is kaput.
The shake out is not over yet. As the houses are re-sold by FDIC who took over the failed banks at 20% of last sold price, the cash holders can build up a rental property fortune.
At the same time, Massachusetts, New York and California, which had been hemorrhaging people for years, and continued to do so in the three years before the financial collapse, suddenly saw the domestic migration loss shrink by as much as 90 percent.
Hmmm. Massachusetts, New York, and California. What could these three states possibly have in common? Could it be that they are governed by entrenched liberal majorities? Over-regulated and over-taxed businesses fled these sinking ships while they could. Then in 2008, the ships sank. No more fleeing.
"The Blonde would like to move to a warmer, drier climate, but we'd have to be able to sell the house."
I don't understand the preference for dryness. Meade and I casually scout the country for places we might prefer to Madison. We took Boulder, Colorado seriously, but the lack of moisture (and the glaring sun) really bothered me.
Huzzah! They're not comng to my geographic area of residence. Waaaayyyy too many people here already. I have to keep a summer place in the mountains just to escape the tourists much less the summer heat. My advice in these hard times is for people to stay put, stay away, and do not come to Rat World (Disney)for vacation. It's way more expensive than you think. But then maybe I'm just being selfish... Not.
Industries based on a growing prosperous middle class and largescale tourism and relocation to new homes are suffering as the nations wealth concentrates at the top.
Mobility, in a sense, is restored when housing prices collapse so much that people owe more money to the bank than the house is worth. And absolutely no prospect of a real estate rebound or new jobs created that will come back from Chinese factories without a tariff - exists. So Michigan, RI, Upstate NY still depopulate. Todays New World Order and free trader version of the Okies.
My proposal was a new financial instrument that makes it possible to trade one underwater house for another, essentially just changing the name on the mortgage.
Financially you're still underwater, but you're in someplace you want to move to, say for a job.
You bought a house at a price you were happy with; it has not appreciated, is all, which isn't a disaster. You still have the house at the price you agreed to.
But if you can't sell, you can't move.
You can't sell because you can't convert into negative money, even thought that negative money would go immediately into another house.
Hence the plan, eliminating that step.
Some financial genius needs to open a registry and sell these services.
Sounds like the professor will be retiring in Seattle. The "other" UW is there.
The owners of houses cannot afford to sell them and pay off the mortgage, and if they "let them go back" to the bank, then the credit rating for a new home mortgage is kaput.
Not to mention that the loan amount is STILL owed whether you 'let the house go back to the lender' or not. If the lender forgives the loan, not likely, then the amount that is forgiven is income to you. So you lose your house, lose your credit rating and still owe the money or have to pay taxes on the loss.
However, for every dark cloud there is a silver lining.
Property management companies are doing rather well right now since if you can't sell, you might be able to rent your property....depending on the area and the market availability of rentals. Were I in an area like that I would start up a property management company in a heartbeat.
My daughter and her husband moved for a better job. They are renting their condominium for the amount of their mortgage. It is a wash. In addition, the costs associated with having a rental can be tax deductible.
When I was still advising clients, I had some who we sold out of their bond portfolios and purchased either individual rentals at distress sale prices or invested in non publicly traded rental REITS. The return on investment far exceeded the amount they could get on the bonds, plus....tax deduction breaks and/or non taxed return on investment, giving a larger cash flow with a lesser tax hit.
My proposal was a new financial instrument that makes it possible to trade one underwater house for another, essentially just changing the name on the mortgage.
1036 exchange may work. Usually done to avoid capital gains. I've facilitated several commercial transactions in the past.
This is a well known fact here in coastal South Carolina. We have two types of migrants--retirees and job seekers. Neither are coming in any numbers any more. Among the consequences has been severe decline in construction employment, bank failures, disappearance of Central American immigrants, a frozen real estate market, declines in local tax revenue, significant layoffs in municipal employment, decreased school funding, a very high unemployment rate, especially among African Americans and a generalized pessimism.
Change indeed.
We took Boulder, Colorado seriously, but the lack of moisture (and the glaring sun) really bothered me.
The color there -- everything is brown most of the time -- really bothered me. Got to have green.
The Left would say that this is not a bug but a feature.
Ann Althouse said...
"The Blonde would like to move to a warmer, drier climate, but we'd have to be able to sell the house."
I don't understand the preference for dryness. Meade and I casually scout the country for places we might prefer to Madison. We took Boulder, Colorado seriously, but the lack of moisture (and the glaring sun) really bothered me.
Two bad feet, two bad knees, a bad back, a broken ankle still healing, and fingers that are getting more arthritic daily. The cold and damp get in all of them, especially in the depths of Winter.
And then there are the depressive effects of 4 or 5 months with little sun, as we have in NE OH.
This is why a lot of people live in AZ.
She'd like to live by the ocean, but water with a dry, warm climate (and there are some places like that) means CA - and she hates it there.
PS I know there are other factors, like culture, night life, etc., in your calculations.
Ever consider NM along the Rio Grande valley - Santa Fe, Albuquerque?
1036 exchange: to avoid having to match specific pairs desiring the opposite move, you'd need a large business to take on the mortgage, say simultaneously with you buying one of their stockpile of underwater houses (which perhaps they'd buy at your request, if that owner is also agreable and wants some other opposite trade).
That way you're no longer responsihle for the old house, just the new one.
Whether that can be abstracted enough to result in the creation of negative money more generally is an open question.
Taos! An interesting mix of artists, new agers, Indians, Mexicans, and a few rednecks. I love Taos..they buried Dennis Hopper there in a beautiful, old, mission.
1036 exchange: to avoid having to match specific pairs desiring the opposite move,
Yea. That is the issue. The exchange must be like/kind. Matching the exchangees on residential properties would be difficult. Plus there is the issue of carry over cost basis when markets for real estate are so diverse in the percentages of decline.
It would be tough, but with a national computerized data base, it might be possible.
I thought this until I read some articles on historical internal migration which pretty much debunked the notion that Americans are highly mobile.
My recollection is that some Americans are highly mobile (like my ancestors) but most pretty much stick in one place.
This is driven home when I look at where all the people I graduated with from high school are now. The vast majority are withing a few hundred miles of where we grew up. (Anecdotally, it seems that the big exceptions are those with technical degrees and those who became military officers.)
Now, among those who don't have a problem moving, being stuck in homes has affected them, but for me that barely rises to "altered" not "drastically altered."
(I've also been astonished at hearing people complain about not finding work when I'm getting contacted about job openings all the time. In fact, I just got a new job. With a raise. So, Go West is valid.
The color there -- everything is brown most of the time -- really bothered me. Got to have green.
I sometimes do miss the green of the east, but green also means humidity and I don't miss that at all. Neither do I miss the ice storms and frigid cold of upstate New York, along with the several inches of ice on the streets.
And then there are the depressive effects of 4 or 5 months with little sun, as we have in NE OH.
I can't say enough about my wife's lightbox, as a mood changer. My sister uses one as well (she lives at 60 N)
Those of us in Florida have noticed the hiccup in migration. Census forecasts from 2005 suggested that FL would break through 20 million in population by ~2009. Hasn't happened yet. However, I am confident that the traditional appeal of the state, along with the lack of state income tax (and other retiree draws like Homestead protection) will have migration returning in the next 5 years. Especially as some of the northern (particularly northeastern) states really turn the screws on taxes.
"Sounds like the professor will be retiring in Seattle."
But I've never been to Seattle in my life. Don't you think I'd have gone there by now if it was the place for me? It's such an obvious place to visit....
"Two bad feet, two bad knees, a bad back, a broken ankle still healing, and fingers that are getting more arthritic daily. The cold and damp get in all of them, especially in the depths of Winter."
I don't understand how bones and joints know the humidity of the air. It seems to me it's the air passageways and skin that feel the air, and these parts like moisture.
I guess it might be that you want a lot of heat and with no humidity, the heat isn't so horrible. But then everyone stays inside with air conditioning. I don't like that feeling.
"And then there are the depressive effects of 4 or 5 months with little sun, as we have in NE OH."
I like the idea of less of light/darkness exremes, but I need moisture. Old people are desiccated enough.
"Ever consider NM along the Rio Grande valley - Santa Fe, Albuquerque?"
Yes. I've been fascinated by those landscapes since I read about Georgia O'Keeffe in Life Magazine in the 1960s. I'm a little afraid of the heat, though, and as I said, when I get there in person, the harsh light and dryness may provoke me on a very instinctive level.
MadisonMan said...
And then there are the depressive effects of 4 or 5 months with little sun, as we have in NE OH.
I can't say enough about my wife's lightbox, as a mood changer. My sister uses one as well (she lives at 60 N)
Lightbox?
"Taos! An interesting mix of artists, new agers, Indians, Mexicans, and a few rednecks. I love Taos..they buried Dennis Hopper there in a beautiful, old, mission."
Yeah, we may scout that area soon.
Winter break is coming soon enough. 6 weeks left to the fall semester.
I'm responding to commenters other than rh. Rh seems to require math.
Don't you think I'd have gone there by now if it was the place for me?
I guess not...I'm one who's still exploring. As others have mentioned, I love the green and seasons of WI, but have spent my last few vacations in CO and have fallen in love with it. The Puget Sound area comes in a close 3rd, though the rain seems a bit much, as does the sun of our southern states.
Also scout out Bend, Oregon. The east side of the Cascades is relatively dry, but Douglas Firs and swift flowing rivers are great to live among.
But for both quick beach access and quick mountain access, you cannot beat Atlanta's location.
Ann Althouse said...
"Two bad feet, two bad knees, a bad back, a broken ankle still healing, and fingers that are getting more arthritic daily. The cold and damp get in all of them, especially in the depths of Winter."
I don't understand how bones and joints know the humidity of the air. It seems to me it's the air passageways and skin that feel the air, and these parts like moisture.
You lived on the East Coast as a girl. You know how the wood swells when the weather is humid.
Apparently cartilage only needs so much moisture and any more is too much.
"And then there are the depressive effects of 4 or 5 months with little sun, as we have in NE OH."
I like the idea of less of light/darkness exremes, but I need moisture. Old people are desiccated enough.
Depends on the person, but, as to light, the suicide rate around here skyrockets in March and April. People can't deal without the sunlight.
"Ever consider NM along the Rio Grande valley - Santa Fe, Albuquerque?"
Yes. I've been fascinated by those landscapes since I read about Georgia O'Keeffe in Life Magazine in the 1960s. I'm a little afraid of the heat, though, and as I said, when I get there in person, the harsh light and dryness may provoke me on a very instinctive level.
We were there in January, Albuquerque to Socorro, and it was beautiful - moist without being damp and green.
You may want to consider it.
PS You're a hothouse rose, Madame. And be grateful you don't have a lot of joint problems.
"I don't understand the preference for dryness."
Yes, I prefer moisture, too. Though it really puts a damper on astronomical observing.
Not to mention that the loan amount is STILL owed whether you 'let the house go back to the lender' or not.
Depends on the state. The state in which I live is a "no recourse" state, so the lender can't do more than take the house.
DBQ: You have raised the issue of "phantom income" in a couple of posts and I hope that the lefties are intrigued enough to look up the concept. A year or so ago Oprah gave away cars to everyone in her audience. They were fainting with glee. Then they were pissed that Oprah had not paid the taxes for them!
Forgiveness of debt doesn't just trigger a taxable event, it triggers Ordinary Income! It is a wonderful little trap door that was built for "jubilee."
When people began to see their homes as financial investments rather than physical shelter the problems began. Instead of working for the day the mortgage was retired the "owners" of today have used the asset as a cash register and are now paying the price. I have absolutely not one scintilla of pity for those who levered up to buy vacations and Rolexes and fancy cars. None.
Lightbox?
Light Therapy. She sits in front of a box emitting the full spectrum of light -- very brightly! -- as she reads the morning paper. Do a search on Light Therapy Box.
Professor: If you have never been you should have a look at the Lake Tahoe area. Close enough to the coast to put some moisture in the air, excellent elevation to fight off gravity, proximity to SF and the splendidly remote northeastern California mountains. Excellent tax advantages on the Nevada side of the lake
Maybe Dallas area road-building will get a chance to catch up.
Eric: I do not think that the tax implications of debt forgiveness go away in the event of non-recourse. Non-Recourse means that the lender cannot go after the borrower for a deficiency should the home be sold in foreclosure. How the IRS views that matter is entirely different. If the homeowner has claimed tax deductions for interest on the mortgage and the mortgage is not repaid then the borrower is going to have a surprise with the service.
Forgiveness of debt doesn't just trigger a taxable event, it triggers Ordinary Income!
BINGO. Taxed on the unpaid or forgiven debt as ordinary income. Also Michael is correct. There may be no recourse from the lender, but the IRS is not likely to be as forgiving. Under the current regulations, you will be taxed.
Althouse....check out central northern California or the Napa Valley Area, Paso Robles area or San Luis Obispo or especially Carmel Valley (not Carmel by the Sea) You would love those last few since they are extremely yuppiefied and Mead would love the growing season. A paradise for growing plants and gardening. College towns or near college towns.
Sunshine most of the year. More sunshiny days than even some places in Arizona. Low humidity but not bone dry. Close enough to the ocean to drive in less than a day or to drive to the Sierra Nevadas and ski or hike or camp.
Downside. It is California one of the highest taxed states in the union and property values are still rather high. But...beautiful.
Lies. And, more lies.
Even the whole "voter ID" thing is a fraud. The government wants to stop everybody! And, ask to see if they're legitimate citizens.
Alabama passed anti-immigrant laws. Followed by Arizona. Both states now have farmers who say they can't hire people who will actually do the work! The American workers walk off after a day or two.
You haven't felt this insanity yet?
One thing the government (and Wall Street) would love to have is INFLATION.
Sure eggs, milk, and gas for your car, costs you dollars more for these items. So, you've cut back on everything else. Which is the "plug" to inflation.
Walmarts is busier, too.
Not exactly a rolling economy.
While there will be falling land prices in Alabama and Arizona ... which isn't in the average person's interest either, as the big guys go up and buy the failed farmers properties.
While you're being told the immigrants are stealing you blind.
NOPE. GOVERNMENT'S GAME.
When they're not doing "the bubble" ... they think up other crazy stuff.
Stay sane.
Short of bailing on my mortgage (which is up to date), no way I could easily relocate anywhere... no buyers.
Yup.. stuck. Part of the immobile work force. Waiting for the pink slip.
Thank you D.C.
"It would be tough, but with a national computerized data base, it might be possible."
HouseMatch.com
Professor: Further to DBQ's recommendations for the California coast (notice she quickly deflected off my suggestion of n.e. Calif)you might want to look at Half Moon Bay which sits north of Santa Cruz. When it is sunny in Palo Alto it is foggy in Half Moon Bay. On the coast. Beautiful and much more affordable than Carmel. Mountains to your rear, great hiking and road and mountain biking. Close to SF but isolated by the fact that there is really only one road in and one road out to the peninsula.
The best climate in the world is in San Clemente, California, the town I grew up in. A window decal sold since the forties proudly proclaims this. Average August high temp is 77. Average January low temp is 45. Average humidity year round is between 75 and 85%. The bad news is that the median home price is $580,000, even after the bust. When I lost my rental in 2002 I had to move thirty miles east, to the land of sweltering summers and affordable homes. I feel like an exile.
Count me in with Wallace Stegner when it comes to why I like living in the West.
"Homesickness is a great teacher. It taught me, during an endless rainy fall, that I came from the arid lands, and liked where I carne from. I was used to a dry clarity, a sharpness in the air. I was used to horizons that either lifted into jagged ranges or rimmed the geometrical circle of the flat world. I was used to seeing a long way. I was used to earth colors—tan, rusty red, toned white—and the endless green of Iowa offended me. I was used to a sun that came up over mountains and went down behind other mountains. I missed the color and smell of sagebrush, and the sight of bare ground."
Not to mention that the loan amount is STILL owed whether you 'let the house go back to the lender' or not.
Depends on the state. In California if one is foreclosed on, short-sales or walks away in lieu of foreclosure that's it. The lender cannot come after you for the balance. At worst, any lender loss is counted as income to you that you have to pay tax on.
and you cannot go anywhere near a mortgage for at least 3 years.
Damn that Stegner could write!
I've heard good things about Sandpoint, Idaho. Huge lake. Mountains. Lots of sun. Genuine 4 season climate. Ben Stein (Ben Stein's Diary in The American Spectator) has a condo there and writes rapturously about the place.
Further to DBQ's recommendations for the California coast
Pacific Grove, where my father now lives is also quite beautiful. Inland are also some nice areas that aren't directly on the ocean San Juan Bautista is nice and still close enough to drive to anywhere you want to go. Only couple hours drive to SF.
(notice she quickly deflected off my suggestion of n.e. Calif)
LOL... now why would that be. I wonder
Probably because I love the wild remote and empty of subdivisions landscape. Winter sunrise
Not to everyone's taste. I'm sure that Althouse would hate it here. Visit yes....live no.
@ Darleen. You are correct.
Quite a few people who are underwater or in a shortsale situation are just NOT paying the mortgage. Are paying down other debt or banking the money so that in a few years they will be free from the crushing mortgage on a home that will never be equal to the debt.
They are making a rational financial decision and I would do the same in their situation.
but I need moisture. Old people are desiccated enough.
SoCal has the perfect lack of humidity for good hair.
Of all the places I've lived, this has been my best hair home.
When I'm sad about my underwater mortgage, I console myself knowing that I may die broke, but I will leave behind photos of me with great hair.
Notice how the liberal trolls never post on nuanced threads like this. If it isn't the typical red-meat stuff(Obama, GOP, Occupy, class warfare) they don't care. I think it goes to show how feeble their minds really are. They have no intellectual curiousity.
@Alex
I think it's because the bots don't pick up on key words. For instance, the garage-bot hasn't turned up because the word "Walker" hasn't appeared once. Now that I've typed it out, odds are 80-20 that the algorithm will be activated.
Tyrone - don't worry the garage-bot algorithm only keys in on thread titles.
I will leave behind photos of me with great hair.
LOL MayBee. That was funny.
Anecdotes aren't worth much, but I do know people who are trapped here in California because they're underwater on their homes.
People visit Seattle in August, and think "This place is incredible".
They move into town, and leave by December. The dark gray with mist is just too much.
On the other side of the hump, the states of Oregon and Washington are deserts with some small agricultural communities. Walla Walla (so nice they named it twice) comes to mind.
We took Boulder, Colorado seriously, but the lack of moisture (and the glaring sun) really bothered me.
The color there -- everything is brown most of the time -- really bothered me. Got to have green.
It really depends on what you are used to. I spent 5 or so years in D.C., and hated the heat and humidity (and, to a lesser extent, Austin). But I also never got used to the fact that it seemed so dank and overgrown.
I grew up in Colorado, so the dryness doesn't bother me, but humidity does. I have spent most of my life between the Sierras and I-25, which runs through Denver and Albuquerque, and most of that is dry enough for me.
I do remember though a couple who would come up every winter to Keystone in CO from NOLA. They would have continuous nose bleeds, despite running multiple humidifiers.
Albuquerque, Santa Fe, and Taos are likely to turn out just as dry. Check the cost of living before moving to the later two - when I was working in Albuquerque, I knew a number of people who commuted to their government jobs every day in Santa Fe, due to the big difference in cost of living between the two. But Albuquerque has its own problems, including some pretty significant poverty. Also, they used to have a practice in much of NM of throwing their beer bottles out on the road - which made jogging problematic.
Sandpoint, Idaho - where Sarah Palin was born. Summers are gorgeous, but winters are cold. About 30 miles south of Ruby Ridge and the bottom of the lake is about that far north of Hayden Lake (but the skin heads have apparently been priced out of there).
Went through Sandpoint a number of times this summer on my way from Spokane to Montana (up the Clark Fork River). The lake is pretty big, and deep enough that the Navy runs a research center there for testing sonar, their new destroyer, etc. Friend I visited a lot this summer has a summer place at the bottom of the lake (Sandpoint is at the top) in Bayview, which is where the Navy base is. Absolutely gorgeous. He has a telescope on his porch so that we can watch the goats on the cliffs across the bay. And, it is a quick 10 minute drive by boat over there for cooking dinner on an open fire.
But, back to the cold - Sandpoint is maybe 60 miles south of the Canadian border, and that means that when we pulled out of that area maybe 3 weeks ago for the winter, it was already freezing at night. But, interestingly, the lake, being so deep, never does freeze.
The other thing about Sandpoint is that they just finished the bypass and opened it up a couple of weeks ago. Used to be that you had to go through downtown to get through town, either on your way up to Canada, or SW into Montana. It was stop and go, but mostly it seemed stopped. No longer. Many living there are worried that this may lose them a lot of business.
Oh, and they have yacht clubs at both ends of the lake, with apparently decent sailboat racing.
@Bruce Hayden
Your friend's house is at the bottom of the lake? Does his telescope work under water?
I not only didn't move to another part of the country because of the housing market and high cost of living, I moved OUT of the country, to Malaysia.
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