Friday, April 22, 2011

Why Housing will NEVER come back

Today's quote comes from Charles Dickens:

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

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U.S. Housing is dead, and it ain't never coming back. Aside from Oil, the reason for its absolutely, positively sure thing ongoing demise? Property taxes.

Property taxes were the vehicle for government extraction of any gains one might have had in their house during the housing boom.  The boom is gone, but the property tax remains... and its like a chronic disease... home owners cannot get rid of it. In most locals (not Cal, but they screwed themselves anyway), these property taxes were the means with which local politicians paid for the votes of the public employees through their unions.  These liabilities are never ending. Property taxes have been combined with the lessons learned by people regarding debt and not saving to doom housing for a generation.

Yes, people need a place to live. "A place to live" is a far cry from the mal-investment that housing has become over the past 30 years. Housing will be redefined very brutally over the next 20 years.

Stay clear of home builders and regional and small banks. Any reported improvement in housing will prove to be a mirage. But there will be reports. Propaganda never sleeps. Those that benefit from enslaving you via property taxes will not die without a fight. They will endeavor to place you in debt (what do you think QE2 is all about? An attempt to lure you into enslavement with cheap and easy terms... but once you sign on the dotted line the monster shows himself) by any means necessary. Young folks! Don't fall for it! Old folks, help keep your young from enslavement.

Oh, and by the way... Employer provided health insurance? Just another vehicle of enslavement. Anybody thinks the Obamacare helped them has rocks rolling around their head... then again, anybody who believes Obamacare will help them is likely incapable of grasping anything I have proposed here.

(I was watching a clip on Yahoo finance with James Altucher. All my life I felt that corporations were behind home ownership for the purpose of creating a barrier to moving, leaving the homeowner/employee stuck, toiling forever in some factory or mining town, unable to move easily to take advantage of new opportunities... most people thought I was nutty ("its the American dream"). And then Altucher, unprodded and out of nowhere and hardly germane to the conversation at hand expresses the same sentiments! Vindication! Shortly there after, Coal Guy makes a comment about the "company store" in the mining towns... think about it... the "company bank" lends the worker his mortgage, the company store sells him all his consumer stuff, and the property taxes finish him off. After a life time of enslavement, what exactly does this poor sot have to show for all his efforts? Not a f*&^ing thing. Is my absolute disdain and hatred for this system showing through yet? Perhaps its my working-class-self-educated-white-trash underbelly showing.)

More soon.

14 comments:

James m Dakin said...

Another great tool for enslavement is everyone's sense of entitlement and absolute need of luxury. It is easy as can be to buy a piece of land off grid, park a trailer, build your own cabin on a cash basis, put up a few solar panels, etc. But no one will do it since it means "roughing it" or "doing without". Let their soft gooey marshmallow backsides wallow in their self made misery. And how has the human race survived this long?

Anonymous said...

I agree with the housing commentary. There is a glut of housing in my area and many more people are living together again out of financial necessity. We bought a 15yr mortgage home, with a bit less than 11yrs left, but it looks like things might implode sooner rather than later.

Jame's comment is also very true, people spend more time looking up the totem pole, than down--and feel entitled to the trappings of modernity, while half the world still struggles for calories.

My neighbor lives in a 110sqft shack, on land he bought from us for 12k. But almost no one would be willing to live as he does--but he lived abroad in places like Costa Rica, where people aren't so house-centric in their existence and actually enjoy being outside--rather than needing special rooms for every activity.

Psychologically people do better going up the ladder than being forced back down the ladder--I still believe that crime will be a major issue as the years go by. 3rd world type conditions in the US seem unavoidable, and people aren't willing to live even like the Amish. The Amish are pretty cool around here, except for some of that DNA fraying from too much in-breeding.
-Meiyo

Charles said...

Not just housing and healthcare. Education has always been the way to train socially-tied workers, first by the church and then by the state. And what better way to keep them working than to saddle them with student debt!

PioneerPreppy said...

It is amazing how the "status Society" manages to do exactly what James and Meiyo mentioned. I really never noticed it myself over the years when I had a good paying job and was traveling all over this part of the globe. Once I was forced into a blue collar job and renounced the debt game it was like night and day. They force you to have all the trappings to feel worthwhile if you renounce them you are some unhinged radical of no real value with a no status car.

Housing is the same, just another tool in their box to trap you.

Anonymous said...

James,

Your spot on. My family moved out into the country from Redford before the collapse of Detroit in the late 60’s. They first bought the property cash, and then built the basement and subflooring for first floor. When that was done they moved into the basement with 6 kids. They finished the house as they lived in the basement. They paid for it all with cash. My parents did the same thing when they built there house 28 yrs ago. They bought 10 acres with a pond and pasture land and lived in a camper as they built the house cash. The first winter they said the heater went out in camper and all they had to heat was a little electric heater. People have lost the sense of pride in sweat equity. They want everything now. Though I admit it was easier for our family because they were all in the trades. MY great uncle hand built the cabinets, my other great uncles helped my Grandpa with the carpentry, and the electrical was done by their nephew. It was just different times I suppose. My dad did more of the work even than my Grandpa. He had a 15 person crew at the time, so he just sent them off to work and built the house while they worked. Not implying we had a lot of money though, my dad was 28 and just breaking into the commercial construction around Ann Arbor. He was just reinvesting all his money back in business to buy equipment. I don’t think my wife would ever let me do that. My thermostat is not allowed to go under 68 because the kidos might get cold, Hahahaha. We have all gotten much softer :)

Dextred

Stephen B. said...

Good comments all. I'll just add that in most of New England anyway, one isn't allowed to live in a trailer. Even many towns in Vermont, some fairly rural, formerly cash poor ones - a state with a long rural, independent history, forbid modular, mobile homes. Many towns in the state require one to hook to the utilities if available, require so many square feet of living space, etc., etc., etc.

I know most all of you know this already, but it is another way the enslavement is forced.

The town in northern Maine I just bought into is rural and agricultural. Property taxes are low. They only have a few town employees, and don't care if I have an outhouse or not, but this town is far from typical any more.

'Just sayin.

Anonymous said...

Stephen,

That is how many areas are now. I know the county I live in you cannot even build a house under 1200 sq ft besides live in a trailer. Why would they ever force people to build bigger houses, maybe because they want bigger tax bills? If you go to the middle of Michigan up you can get some really nice farmland on the cheap. The Hedley amendment has protected the tax bills in a lot of areas. The idiots in my township voted to bypass the Hedley protections and taxes doubled in less than 10 yrs. You have to remember where I live we don't get any services except road grading, snow plowing only during the work week 7 A.M. Monday to 5 P.M. Friday night. We have one cop that patrols literally half of the northern part of my county. I have no flipping Idea where our money is going.

Dextred

dennis said...

After the tech stock collapse folks stuffed their entire life saving into the one guaranteed investment, their home. I built custom cabinet for this insanity. A 5000 square foot house for a childless couple. Forty thousand in cabinets for a kitchen where once a day some one uses one of the microwaves. I could see the crash, but never suspected the mortgage con. I never got into debt for my business, but the collapse wiped out my entire customer base.

I absolutely hate building codes. Shelter is such a simple basic need we should be able to get it at any income level with no loans. One of Dakins junk lots and some basic construction. Anybody with half a brain can build a simple structure. No engineer needed.

This really gets me every time some republican spouts off about small government. They could start with the building code right here in Republican controlled Idaho. Let me see some small government for a change... hypocrites!

The good news is it has got me into gardening and livestock. Hopefully I'll be using my building skills on some bee hives soon. If I barter for some bees I'll have it made.

Anonymous said...

I really think people are out of their minds. This is the link to the Mickey d's beat down.

http://www.liveleak.com/view?i=ec0_1303444048

This is the link to the Las Vegas police beat down of a guy in his own front yard filming the cops across the street.

http://www.lvrj.com/news/exclusive-police-beating-of-las-vegas-man-caught-on-tape-120509439.html?viewAllComments=y&c=y

Oh and here is the two tourist killed by some little piece of trash.

http://www.dailymail.co.uk/news/article-1379046/Florida-Britons-searching-meal-early-hours-missed-turning-It-cost-lives.html

Here is a story of cops killing a guy with a taser at universal studios. One guy against 5 cops and they tase him? Really, after watching the first cop video I think this guy was just looking for directions and the cops did not like that so they made up a story to tase him and he died.

http://www.bbc.co.uk/news/world-us-canada-13170696

Dextred

Anonymous said...

What exactly is the difference between Stalinist communist central control and that exerted through taxation and regulation other than the gulag?

Our system ain't that different. Its just sold differently.

PioneerPreppy said...

Dex

The guy in Vegas had a history of going out of his way making and editing videos while antagonizing cops. Of course the cop in that case has had two prior legal killings to his credit. Oh and the video'er wasn't in his own front yard either. Still there was no reason for the cop to react the way he did.

Rise of the police state here we come.

kathy said...

I thought of you this morning Greg. The headline on my AOl News page was what a failure to raise the debt ceiling would mean to the US. Who plnated it and why? My brain didn't use to work this way.

Greg T. Jeffers said...

Kathy:

Glad to hear you thinking this way... there are no coincidences when stories like this make their way into the media.

Anonymous said...

Perhaps we should bomb them and then send thugs like Derek Colling to beat the survivors; that’ll teach ‘em to not raise the debt ceiling. I know that’s probably not the optimal solution; but hey, inflicting death, destruction, pain and misery is just about the only thing were still good at.

Best,
Dan