Palm Springs: Mortgage crisis may delay local recovery until 2015

Link to Desert Sun article: Mortgage crisis may delay local recovery until 2015 | mydesert.com | The Desert Sun.

pool at Ramona Villas in Palm Springs

 

This was a fine kettle of fish to wake up to today, front page story in our local paper about the economy not recovering for four to five more years. So “the mortgage crisis may delay local recovery until 2015.”

I had a conversation with a friend last night about crashed real estate prices. Truly, if your home is only worth half of what you paid for it, what sense does it make to keep paying the mortgage on that original, fairy tale amount?

We talked about the possibility of valuations rising again. But it was a bubble. They won’t rise to that prior level for years and years, if ever. For the amount of a mortgage payment on a 300K condo loan out here in Palm Springs, which would be roughly $1700 or so, not counting your HOA fees and such, you can easily rent a 3 or 4 bedroom single family home in a great area, with a pool!

It’s disheartening, frustrating, maddening and a looming national disaster – as so many people are in this situation. I wonder what will happen when they all realize prices are just not ever going to go up again, to any where near those record levels? What happens when everyone walks away?

I take an early morning walk every day. Along one of the roads on my trail, there’s a house with a derelict desert front yard, a weathered “for sale” sign, and various pieces of seen-better-days furniture in the driveway and stacked at various places around the house. For a while, there’d be handwritten signs about the junk for sale, along with a phone number you could call. There was a car or cars parked in the driveway. Frequently, I’d see lights on in the house – a classic 50s ranch style house in a really nice residential area of Palm Springs.

In the last few weeks, the junk has gone. Now the car has disappeared as well. Earlier this week, a notice was tacked up to the front door. I checked it out the other day – of course it was the foreclosure information. Not a surprise, but like the beginning of a sad song you weren’t quite ready to hear, way too early in the morning.

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~ by jimarnoldla on October 23, 2010.

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