% | $
Quotes you view appear here for quick access.

GSI Lumonics Inc. (GSLI) Message Board

  • rcmpolice rcmpolice May 30, 2005 2:54 AM Flag

    U.S. housing boom a bust for many

    U.S. housing boom a bust for many
    Surge in home ownership brings spike in foreclosures
    By Michael Powell
    Updated: 11:39 p.m. ET May 29, 2005

    PHILADELPHIA - To walk Thayer Street in northeast Philadelphia is to count, door by door, the economic devastation afflicting a working-class neighborhood. On a single block, 18 of the 42 brick rowhouses have gone into foreclosure in the past three years.

    There's Marciela Perez, who fell ill with cancer, lacked health insurance and stopped making mortgage payments. Barrel-chested Richard Hidalgo, who got divorced and could no longer make his monthly nut. And Mike O'Mara, a rawboned and crew-cut truck driver who took on too much debt, lost his job and fell behind on his mortgage.

    "Mortgage companies convinced us to refinance, and each time our bill went up," O'Mara said as he surveyed his narrow street from his shaded front porch. "You fall behind and they swoop down on you."

    Philadelphia, its suburbs and indeed much of Pennsylvania have experienced a foreclosure epidemic as low-income homeowners take on mortgage debt they cannot afford. In 2000, the Philadelphia sheriff auctioned off 300 to 400 foreclosed properties a month; now he handles more than 1,000 per month. Allegheny County, which includes Pittsburgh, had record auctions of foreclosed homes and officials speak of a "Depression-era" problem. The foreclosures fall particularly hard on black and Latino families.

    Boom brings dark side
    For some American homeowners, the greatest housing boom in U.S. history has delivered riches. They repeatedly tap their homes for equity and use the cash to purchase granite countertops, a BMW, even a trip to the Super Bowl. But there's a dark side -- a sharp rise in foreclosures that is destroying the single greatest generator of personal wealth for most Americans. Foreclosure rates rose in 47 states in March, according to, an online foreclosure listing service. The rates in Florida, Texas and Colorado are more than twice the national average. Even in New York City and Boston, where real estate markets are white-hot, foreclosures are rising in working-class neighborhoods.

    Virginia, Maryland and the District have relatively low foreclosure rates � analysts say troubled owners in those booming markets can still sell their homes before facing foreclosure.

    Should the nation's housing bubbles deflate, as many economists and federal officials expect, the foreclosures could prefigure a national crisis. Americans now shoulder record levels of housing debt � more than 8 percent of homeowners spend at least half of their income on their mortgage.

    "We are clearly seeing a spike in foreclosures in a number of our major urban areas," said Julie L. Williams, acting U.S. comptroller of the currency, whose agency regulates the nation's banks. "It can lead to a downward spiral for neighborhoods. If we are not careful, the American dream can quickly turn into the American nightmare."

    A recent study in Chicago found that rising foreclosures, and attendant social dislocation, fuel increases in crime rates.


    replace the * with an h

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • BTW, a few weeks ago I mentioned that there had been townhomes built across from me and thre off them had gone up for rent. Well, another 4 of them went up for sale and the prices are between 610,000 and 669,00 (3/2 maybe 1900 sq. feet). Not bad you say? Consider this: They were sold 9-12 months ago by the builder for 410,000 to 449,000. Again, it's only anecdotal but you can't tell me that this isn't the manifestation of "irrational exuberence" in the housing market. These homes have no pool, park or even a deck. Just 3/2 in a half decent neighborhood.

      Ladies and Gentlemen: Do not be alarmed! That loud crashing noise you hear is only the sound of "investors" being crushed as their property prices collapse around them.

      • 1 Reply to navyat1ret
      • It is clear about the symptoms, we are going to have one hell of crash in real estate, the plus value on property is going up in a single year the equivalent of 10 years & more, that is very grave and dangerous.

        The credit push by American companies is alarming, I was approached by 2 US based financial institutions for loans for my businesses as well as credit cards, which I turned down since I finance myself.

        But can you see the new bankruptcy law what it is doing? Hooking people for their entire life to pay to the credit companies.

        First they run after you, then once you are loaded with credit, they come after you with a vengeance & there is nothing you can do about it, the interest rate on late payments is 30 % on top of the usual 24% regular rate, that is horrible.

        In Canada, we have the same real estate bubble but at a smaller level and the Government is directing financial institutions to tighten the credit, I hope they will, however the impact of a US real estate crash is going to affect us regardless.

        I hope some of you with some extra cash will capitalize on the situation when things go bad, I am all in liquid cash only interested in small homes after the crash, they�ll be small investments in each home and few of them.

    • You beat me to the punch!