Thursday, February 18, 2010

Getting Started

Hello out there! This is my very first blog post!

I have been meaning to start a blog for a while now, but something I read today finally drove me to doing it. I read an article earlier at's news feed about how there's a "shadow inventory" of foreclosures currently looming in the United States. I'd post a link to it here, only I'm not sure how long the link would work, and I wouldn't want to disappoint anyone.

The article basically pointed out that, despite reports of housing prices going up for the first time in a long time, the housing crisis continues to worsen. The idea is that so many people are REALLY late paying their mortgages that all of the mortgage agencies and courts can't keep up with the number of home owners whose houses need to be foreclosed. So many homes WILL be foreclosed--and WILL be for sale--at REALLY LOW prices--in a little while. But how soon? Supposedly, it could take as long as three years before they're done selling all of these foreclosed homes! Yikes!

Just yesterday, the pastor at my local church was telling us about how they are going to have students at the church's school learn about the homeless. He emphasized that it is no longer just deadbeats and drug addicts who are homeless. He is absolutely right.

The number of homes in the "shadow inventory" is supposedly roughly 1.8 million. This could easily account for housing of about 1.5% of the American population. Remember that these are just the homes in that "shadow inventory." The article appears to suggest that this is only about 1/3 of all homes that are or will be foreclosed. Imagine, in the somewhat near future, that 1 in every 20 Americans will have been removed from their homes.

However, things are more complicated than this. There are also apartments to rent. Some of those people whose homes were foreclosed might be able to move into an apartment. However, depending on how badly damaged their credit scores are, that might not be possible even if they would have enough money for monthly rent, as many apartment landlords do credit checks before permitting a tenant to move in.

To make matters worse, foreclosures don't even touch on the numbers of people who have been evicted from their apartments. All in all, it leaves us with many homeless people. And just as our pastor said, it's not just the drug dealers anymore.

I wish this were the entire story. Unfortunately, it is not. We must also confront the possibility of entire regions that effectively become ghost towns or cities. If there are many houses and apartment buildings that are deserted in spite of their being completely safe structures, then what does it say?

My parents live in Providence, Rhode Island. Providence is a beautiful city, likely mostly because of the accomplishments of the former mayor, Buddy Cianci. Nonetheless, in the past few years, the housing market there has really become topsy-turvy, even by modern American standards. Many large apartment towers have been constructed. Most of them contain luxury condominiums. Most of us would not be able to afford those condominiums if the economy were in decent shape. At a time like this, it seems almost no one can. And so there they sit, with much of them empty.

Perhaps an even worse aspect of the feverish construction of these luxury condominiums was the occasional need to knock down other buildings. There were a few businesses in Providence's Richmond Square, for example, that were forced to close down in preparation for demolition of their building so that more condominiums could be put up. That means jobs get lost, too, folks.

So what do we do? If we keep at it as we do now, then will we have a bunch of abandoned buildings that no one is allowed to live in because nobody (except a very lucky few) has enough money to live inside?

The very thought of this possibility sends chills down my spine. I hope that readers of this post understand why and are as concerned as I am about our collective well-being in the future. What can we do to prevent this disaster from happening? Please leave me your thoughts. I value discussion here.