Tuesday, August 21, 2007

I Blame HGTV

I've just finished doing the research and substantive edit of a book designed to help newlyweds through the process of buying a home. The author, a fan of sub-prime mortgages in SOME cases, does ask readers to do some major work before jumping in: make a budget and then stick to it for a few months, instead of just assuming that you will; don't have a mortgage bigger than what you are already paying in rent (providing you're meeting your rent payments without a problem); remember that happiness is not dependent on glass-tiled bathrooms with soaker tubs, etc. Basically, reminding people to stay sane.

Sanity has been hard to come by in real estate for the last few years. The early adapters to bubble housing prices and the rise of HGTV made a fortune. Soon, everyone felt that they should be in on it. If you weren't buying, upgrading, or flipping you were an idiot, doomed to a life as a wage slave. Turn on any one of half a dozen TV channels and you could watch 22 year old waiters and 40 something housewives leverage the finances to buy a wreck and then, a few setbacks and many visits to Home Depot later, reveal the newly gleaming home and their expected profit margin--usually about as much as most people make in a year or two.

I like buying lottery tickets. I probably average a $150 worth of them every year, usually when the jackpots have reached a point where I can give enough away to friends and family and still never have to work. My $3 a week gives me at least as much entertainment value as 75% of the movies I go to. So I consider them a good value, even though I only win about $50 a year. I've heard lottery tickets described as a sin tax or a stupidity tax; I prefer to think of them as a dream tax on avarice.

Which is basically what happened with the sub-prime mortgage market. People listened to their neighbours and co-workers, they watched the reno and flip shows, and almost every time they went online a pop-up assured them "No credit, no problem--you can still qualify for a mortgage!" They started to dream of surplus, of quitting the joe job and sitting down to acclaim for their financial acuity and good design sense. Banks and mortgage brokers fiddled with figures to enable clients to go into dubious debt. Clients abandoned all common sense and signed on the dotted line.

And now that dotted line has come due. Housing prices in one overly inflated bubble market, Los Angeles, have gone down by an average of 25% in the last year. That means a house that was worth $400,000 a year ago (probably financed with a mortgage loan of $412,000) is now only worth 300 grand--so, as your special 0% monthly payment of $1,144 switches to a mortgage rate of 5.5% with an unpayable $2,340 payment, you can't even sell it and come out even. Which is why subprime mortgages may temporarily overtake that old standby, medical bills, as the chief instigator of personal bankruptcy over the next few years.

Good luck to the all avaricious dreamers. They'll need it.

20 comments:

Keifus said...

"Happiness is not dependent on glass-tiled bathrooms with soaker tubs..."

"This HGTV program brought to you by Kohler's new series of soaker tubs. You deserve a soak!"

There's something to be said about availing oneself of easy money. Unlike the lottery ticket, the housing thing was a sure bet, provided you didn't overindulge (which I suspect many did). A part of me, and not exactly a small part, is dying to see the bastards founder. It's pure schadenfreude. I didn't get in early, and since I chose to live within my means, I have lived poorly. (Also, I want to be able to move from that dump one day.)

But you're onto something with teh avaricious dreaming.

Michael Daunt said...

Happiness is too dependent (up)on glass-tiled bathrooms with soaker tubs.

Full disclosure: I work for the company that owns HGTV.

kol said...

I'd be lying through my coffee stained teeth if I didn't admit to wanting a soaker tub (it's the author's opinion, after all... I'm just the ghost writer in the machine).

andrea said...

You're so right! I put my back out last week, discovered HGTV by default and now I'm hooked! I'm one of those morons who thinks I'm missing out on something now because I'm not a property developer. And now I secretly lust after the idea. I'm not much of a risk taker, though, mostly because it's too much work. I'm still sitting on a 10 year mortgage (10 months to go!), never bothering to renegotiate when interest rates continued to drop. The good news is that my local housing market continues to be hot, so the house is double what it was worth when I bought it.

More than you ever wanted to know from someone you've never even heard of! :)

Dawn Coyote said...

Hey, g'friend - you need to post a link to your new location.

Anonymous said...

Good day !.
You may , perhaps very interested to know how one can manage to receive high yields .
There is no initial capital needed You may start to get income with as small sum of money as 20-100 dollars.

AimTrust is what you thought of all the time
The firm represents an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

It is based in Panama with affiliates around the world.
Do you want to become a happy investor?
That`s your chance That`s what you wish in the long run!

I feel good, I started to take up real money with the help of this company,
and I invite you to do the same. It`s all about how to choose a correct companion utilizes your money in a right way - that`s it!.
I earn US$2,000 per day, and my first investment was 500 dollars only!
It`s easy to join , just click this link http://udoveroc.lookseekpages.com/ofegogu.html
and lucky you`re! Let`s take this option together to become rich

Anonymous said...

Good day !.
might , perhaps very interested to know how one can reach 2000 per day of income .
There is no need to invest much at first. You may begin earning with as small sum of money as 20-100 dollars.

AimTrust is what you need
AimTrust represents an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

It is based in Panama with offices around the world.
Do you want to become a happy investor?
That`s your choice That`s what you wish in the long run!

I feel good, I began to take up income with the help of this company,
and I invite you to do the same. It`s all about how to choose a correct partner who uses your money in a right way - that`s the AimTrust!.
I earn US$2,000 per day, and my first investment was 500 dollars only!
It`s easy to start , just click this link http://zynuwoteni.exactpages.com/ladoraji.html
and lucky you`re! Let`s take this option together to get rid of nastiness of the life

Anonymous said...

Hi there!
I would like to burn a theme at this forum. There is such a thing, called HYIP, or High Yield Investment Program. It reminds of financial piramyde, but in rare cases one may happen to meet a company that really pays up to 2% daily not on invested money, but from real profits.

For several years , I make money with the help of these programs.
I'm with no money problems now, but there are heights that must be conquered . I get now up to 2G a day , and my first investment was 500 dollars only.
Right now, I'm very close at catching at last a guaranteed variant to make a sharp rise . Visit my web site to get additional info.

http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

Anonymous said...

Hello!
You may probably be very curious to know how one can manage to receive high yields on investments.
There is no need to invest much at first.
You may commense to get income with a money that usually is spent
for daily food, that's 20-100 dollars.
I have been participating in one project for several years,
and I'll be glad to let you know my secrets at my blog.

Please visit my pages and send me private message to get the info.

P.S. I earn 1000-2000 per day now.

http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

Anonymous said...

[B]NZBsRus.com[/B]
Forget Idle Downloads With NZB Downloads You Can Hastily Find Movies, PC Games, Music, Applications and Download Them @ Rapid Speeds

[URL=http://www.nzbsrus.com][B]NZB[/B][/URL]

Anonymous said...

Making money on the internet is easy in the underground world of [URL=http://www.www.blackhatmoneymaker.com]blackhat forums[/URL], You are far from alone if you don't know what blackhat is. Blackhat marketing uses alternative or not-so-known avenues to generate an income online.

Free Poker said...

This is really a fascinating website and all your articles, lots of useful stuff. One thing I just want to say is that your Awedacity Blog is so perfect to me.
--------------------------
Our www: Texas Holdem Poker

Free Poker Money said...

I am really enjoying reading your well written "I Blame HGTV" article. I think you spend numerous effort and time updating your Awedacity blog. I have bookmarked it.
--------------------------
Web: Poker Bono sin deposito & Poker sin deposito

No Deposit Bonus said...

It’s good to see this information in your "I Blame HGTV" post, I was looking the same but there was not any proper resource, thanks now I have the link which I was looking for my research.
--------------------------
My website: Poker Bonus to play poker.

Anonymous said...

top [url=http://www.c-online-casino.co.uk/]uk casino bonus[/url] hinder the latest [url=http://www.casinolasvegass.com/]free casino[/url] free no store hand-out at the best [url=http://www.baywatchcasino.com/]casino online
[/url].

Anonymous said...

[url=http://www.casino-online.gd]online casino[/url], also known as settled casinos or Internet casinos, are online versions of acclaimed ("crony and mortar") casinos. Online casinos approve gamblers to sham and wager on casino games down to the ground the Internet.
Online casinos habitually announce odds and payback percentages that are comparable to land-based casinos. Some online casinos make a case on higher payback percentages with a believe sulcus automobile games, and some set common payout piece audits on their websites. Assuming that the online casino is using an fittingly programmed unspecific compress up generator, register games like blackjack clothed an established congress edge. The payout slice as a replacement representing these games are established via the rules of the game.
Multitudinous online casinos wave on determination or emerge their software from companies like Microgaming, Realtime Gaming, Playtech, Impetuous Underhandedness Technology and CryptoLogic Inc.

Anonymous said...

Hi to all, the contеnts present at thіs ωeb
pаge are truly аwesome for peoρle experience, well, keеp up thе good
ωoгk fеllοws.

Feel free to viѕit my homеpage; vipshoppingalert.com

Anonymous said...

It is simple that you can avail the much needed cash advances simply by clicking the mouse starting from your home as well as office. The actual 90 day cash advance loans are offered inside an easy and stress free manner. They had hundreds of new types to work with as well as received a fantastic buzz coming from people concerning their brand. instant payday loans An unsecured loan is that * a loan which has no sort of security regarding it!

-blessed b9, Catalyst4Christ said...

Cya...

-blessed b9, Catalyst4Christ said...

Jesus, have mercy on our souls...