Linking ≠ endorsement. Enjoy and share:
- Investor-owned homes often fall into disrepair as rental properties
Kevin Smith, San Gabriel Valley Tribune, writes:
Renters typically don’t care as much about the appearance and upkeep of the properties as buyers who purchase homes to live in them. And many of the investors are absentee landlords who generally feel the same way. It’s become a problem across the Southland, according to Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora.
“You have a lot of slumlords who will put as little money as possible into the homes to maximize their return.” she said. “And it has an effect on the neighborhood if you have people who are not taking care of the landscaping and the outside of the homes.”
Walsh said he still gets asked about the long-feared “shadow inventory” of distressed properties that some predicted would trigger another surge in foreclosures. But those warnings, he said, didn’t account for the breadth and depth of the government’s eventual intervention in the crisis.
“Some of the banks will vacate the properties and then put them on the market, but most of them are just selling them on auction.com,” said Carlos Sandoval, a Realtor with Sierra Realty in Fontana. “Everything is just moving so quickly. I’ll put a property on the market and within 24 hours I’ll get calls from seven to 10 investors. Some are corporations that keep them to rent out and others are fixed up and sold to buyers — some from other countries.”
Being a slum landlord is not good business. There are laws in many places that allow the government to come after such landlords, costing those landlords much more than they gained with their short-term, slummy strategies.
In addition, obtaining good insurance from reputable carriers is nearly impossible for such neglected properties.
There’s truly a very high liability-risk exposure for slumlords. Don’t be one.
On the shadow inventory, we’ve taken the same position in this site as stated above by DataQuick President John Walsh.
- Calculated Risk: Freddie Mac: Mortgage Serious Delinquency rate declined in September, Lowest since April 2009
… most of the reduction in the serious delinquency rate is from foreclosures, short sales, and modifications.
Although this indicates some progress, the “normal” serious delinquency rate is under 1%.
At the recent rate of improvement, the serious delinquency rate will not be under 1% until late 2015 or 2016.
- Alan Greenspan owes America an apology | Dean Baker | Comment is free | theguardian.com
Wow, Dean Baker really, really rips Alan Greenspan for Alan’s utter failure as Fed Chairman.
The horror story could have easily been prevented had there been intelligent life at the Federal Reserve Board in the years when the housing bubble was growing to ever more dangerous proportions (2002-2006). But the Fed did nothing to curb the bubble. Arguably, it even acted to foster its growth with Greenspan cheering the development of exotic mortgages and completely ignoring its regulatory responsibilities.
We have to say that if we saw the bubble and coming collapse in 2002, which we did, then how in the world can Alan Greenspan, with all of the resources and data flowing at the Fed, not see it (rhetorical question, that).
- mainly macro: The ‘official’ cost of austerity
What ended the EZ crisis was not austerity but OMT: if that had been rolled out in 2010 rather than 2012, other periphery countries could also have adjusted more gradually. And of course fiscal consolidation in Germany and some other core countries was not required at all. If instead we had seen fiscal expansion there, to counter the problem of hitting the ZLB, then the overall impact of fiscal policy on EZ GDP need not have been negative. (Section 5 of Jan in’t Veld’s paper looks at the impact of such a stimulus.) That means that over 3 years nearly 10% of Eurozone GDP has been needlessly lost through mistakes in policy. This is not the wild claim of a mad macroeconomist, but what simple analysis backed up by mainstream models tell us.
We agree with Simon Wren-Lewis’s analysis there.