North Dakota Avoids The Housing Slump
By Tom | February 3, 2008
Apparently, the state of North Dakota had dodged the housing slump bullet, and you can still sell a house for more than you bought it and get a favorable loan, too. A story coming out of the AP, today says that the state has managed to duck the worst of the housing crunch thanks to a strong local economy and conservative lending that avoided the worst excesses of the mortgage market bubble.
It seems like in North Dakota, people don’t buy houses to improve them and sell for a profit, but instead buy them to actually “live in”. Some of the figures quoted in the story, such as the home prices do not reflect the average price of housing in the state, either. In the larger cities like Fargo, Bismarck, and Grand Forks, you can find some houses that are actually “over” $100,000 to buy. The majority of the houses that are for sale in the state are priced much lower, however. Perhaps this has something to do with the climate and the stigma of North Dakota.
No matter what the reason is for the low price of houses in North Dakota, one thing is for sure. There are a lot of people that buy houses in the state with cash. A lot of times, there isn’t actually a need to take out a loan or mortgage to own a home in North Dakota. While people in a lot of areas of the US think that a $200,000 house is something that’s “normal”, people in North Dakota start to squint when the asking price gets over $60,000.
There have been times that I’ve heard of people buying four-bedroom houses on 15 acres of land for $5,000. I also knew somebody that was selling a complete undeveloped block of land with six lots, all of them already wired for electric and with water piped in for $2,000. There are deals all around the state that would make other people in the country say, “No Way!”, in disbelief. Of course, you have to deal with below zero temperatures for a couple weeks out of the year, but people that have never been through it always make it sound worse than it is.
When I moved to the state, we had just sold a two-bedroom house in another state. That house was sold for about $120,000, and after paying off the current mortgage, taxes, etc. we were left with enough to buy a home, free and clear in North Dakota. The four bedroom house that we bought cost us $29,000. Thankfully, we haven’t had a mortgage in the past 13 years.
Even the cost of renting a house or apartment in the state is very low, compared to the rest of the country. A couple years ago, we had some friends that moved here from down South (a relative term, since “everywhere” is “down South”). They were able to move into a four bedroom house, signing a six month lease for only $300 a month. While they actually stumbled on a really good deal, the average price of renting a two bedroom house or apartment remains below $600 a month.
Honestly, there is probably no other state in the US that you could find these types of deals. The draw back of moving to North Dakota from another state, however, is that once you move here, it’s a little hard to justify moving anywhere else. Moving to another state would simply cost way too much, even if you get a job that pays double or triple what you make in North Dakota, you’d be working to pay for housing costs that didn’t exist here. We tried moving, once, but the house that we would have moved into would have cost us $1,800 a month for rent. It was the lowest priced house we could locate for our family’s needs. Taking a step back and realizing that was more than I make in a month, now, the decision was clear.
Topics: Climate, Economy, Housing, Loans, Personal | No Comments »
Trying To Stay Busy
By Tom | January 30, 2008
Even after asking for advice, in the previous post, I wasn’t able to save or invest any of my tax return because of other bills that needed to be taken care of. If the bills don’t get taken care of when we have the money, we usually fall way behind.
The past couple weeks have been a little more stressful than normal. Not because of money, but because of some personal things that have been happening with our friends and extended family. Most of the problems that they’re having don’t really affect us in any way, except that we need to be understanding of what’s going on. With everything that’s happened, there’s really not too much that we can do, though, which is actually even more frustrating and stressful.
I’ve been trying to get some extra side work, building or redesigning web sites, but I really don’t think I’m being as good of a salesman as I could. It’s either that, or I end up talking to the wrong people, somehow. For example, there’s one web site that (I feel) needs a major overhaul and could use a ton of content creation. With everything that I could offer, I would charge somewhere in the area of about $2,000 for various improvements, content creation, and search engine optimization. Not a bad deal, if you compare it to what others charge for the same thing.
After talking to somebody that I thought was “in charge” of the site, he put me on hold for a week, due to his busy schedule, which I totally understand. When he wrote me back, he told me (among other things), “You’re welcome to tell me what to do with the site, but the problem is that I don’t have any real power over it.”
Well, first of all, I don’t want to “tell them what to do”. I’d like to talk with them about what I think they need to do and be hired to do it for them and make it work. Second… why didn’t he just forward my message to the person that actually “has” the real power over it? Why couldn’t he just talk to the person that is trying to make this site work, and let him know that there’s somebody that wants to help?
I’m sure I’ll set up a time to talk to him at a local coffee shop (which he also suggested), and I can tell him that my real intentions are to be paid for doing work on the site… not just to freely offer my services as a consultant. If they only want me to “tell them what to do”, I suppose I could do that, also, but it’s not like they’re some sort of non-profit organization, or something. There has to be a fee for laying out suggestions and a plan for them, if that’s all they want.
Maybe I should actually find out who has the “real power” over the site and take that person out for coffee, instead.
Topics: Money, Personal, Technology | No Comments »
Tax Time, Again
By Tom | January 13, 2008
It’s the time of year when the poor people with kids make more money and the “well-to-do” people without kids get huge bills from the government. Around tax time, you always hear about people complaining or waiting until the last minute to file, so they can keep their money longer. I, personally, love to go in and get my taxes done as soon as I get my W-2 forms from my employer.
This year, I already went to H & R Block and after all was said and done, I’m expecting about $3,500 back as a refund from the US government. It should be showing up on the H & R Block debit card by next Wednesday.
We already have plans to pay our property taxes with most of it, and we should have about $1,500 left over. We may take care of a couple other smaller bills with what’s left, but we should still have about $1,000 that we need to decide what to do with. At this point, I just plan on keeping it on the card as sort of a “rainy day” fund. Something that we would be able to tap into, throughout the year, as things come up.
I could either do that or pay some of our bills ahead, so we can manage to stay on top of them a while longer, since tapping into the money for an emergency would mean tapping into it for those bills, anyway… things like electricity, gas, or telephone.
We do plan on taking a trip up to Winnipeg, this summer (under 1000 miles, round trip), and we might want to keep it on the debit card for that, though, too. Even though we could save enough for gas and a hotel room, without using it, it would be nice to have, just in case. Maybe we could wait until after the trip, keeping the money until then, to decide.
Maybe there’s something else I could do with it. I “can” get the money out in cash and put it into a 6 month CD, or something. I’ve just never done that type of thing, before, so I’m not sure I want to. It’s not like we can “spare” the money, as it could definitely be used for something. I’m just not sure if I want to lock it up for 6 months, or whatever.
Any suggestions? What would you do if you had an extra $1,000? Spend it, save it, invest it?
Topics: Money | 1 Comment »
What Is Financial Responsibility?
By Tom | January 12, 2008
Financial responsibility? How would you define that?
Would it be defined as being responsible with the money that you have by not spending it on things that you don’t need? Would it be defined as simply the duty or obligation that you have to your family, in relation to money and finances?
Recently, we received a nice sum of money from a relative as a belated Christmas present. My wife and I each got an envelope containing a small stocking (one that would fit in the palm of your hand) that each had a $100 bill folded up, inside. My wife opened hers, first and said, “I got a hundred dollars!”. I opened mine, next next and also found a hundred dollars inside.
Immediately after the excitement of finding unexpected money, my wife held out her hand as if to have me hand her my $100 bill. She said “We have bills to pay”. After hanging on to it for another 20 to 30 seconds, I handed it to her. I knew that we could definitely use it to pay some bills.
While there may be a few different definitions of “financial responsibility”, I think that any money that you receive as a gift should be exempt. When I think about what I would have spent it on, anyway, I would have probably bought something for my wife. That’s another type of responsibility that I also have. One is definitely more important than the other, but I guess the bills need to get paid, too.
Topics: Money, Personal | 1 Comment »
Foreclosures - Hitting Close To Home
By Tom | January 10, 2008
This could prove to be one of the most difficult blog posts that I’ve ever written. While I never thought that I would be writing about the “housing crunch”, it seems to have hit a lot closer to home than I ever thought it would. Because I don’t have a mortgage on my house, and it’s paid for, free and clear, there was no way I would have thought that this crisis would have affected our family.
A couple days ago, I learned that my wife’s sister and her husband have become victims of the US’s worst housing slump since the Great Depression. I’m not exactly sure of all of the details of how or why it happened, but they will be foreclosing on their house, very soon. The house will go “up for bid” and be re-sold to the highest bidder.
One of the reasons that I never expected this, is because they both work. He, alone, makes at least three or four times more money than I do. They are not poor, by any standards. They recently took a family vacation to one of the Disney parks for a couple weeks. They drive vehicles that are probably worth more than my whole house. Every time we talked to them, things were going great.
I would always tell my wife, after the phone calls that they “can’t be doing that good”, and that even if things are going wrong, they wouldn’t let us know. I told her that they would talk themselves up to make everything sound perfect. Of course, the reason I would tell my wife this kind of stuff was because we “knew” what kinds of problems we had, and she would always say something to the effect of “My sister has such a great life. Why can’t we live that kind of life?”
Now that they’re about to lose their house that they have put so much work and money into, I’m really having a hard time with it, myself. My mind doesn’t want to think that even though they actually “did” have the seemingly great life, that everything they had will be lost, and they’ll have to start over. Of course, they’ll be able to get another house, even if they have to rent or move to a different area. He’s used to traveling for his job, so the area’s not a big issue. The fact that they put so much money into paying for the house and will end up with “nothing” at all to show for it is really disturbing.
A report from Countrywide Financial Corp. that was released, yesterday, gives us all of the numbers and percentages of the problem that is only getting worse. When you start to realize that each one of those numbers is an actual family that has lost everything, the problem starts to get more “real”. If you know somebody who this has happened to, you realize that these aren’t just numbers, at all.
When the Chief Executive of the largest U.S. mortgage lender calls the nation’s housing slump the worst since the Great Depression, it definitely time for people to sit up and take notice. If you do a search for “great depression” +foreclosure, you’ll get over 103,000 hits on Google. The problem is that most of the people that are talking about the association between the two are getting the cause and effect wrong.
The foreclosures that happened before the great depression were actually part of the cause of the great depression, itself.. not the fact that people couldn’t afford their houses “because” of the Great Depression. In other words, the banks and lending institutions had foreclosed on so many houses before the great depression that they couldn’t afford to pay the property taxes on them once the depression hit, thus reducing their ability to pay depositors. I don’t think that’ll happen, now, however, but those who don’t know their history are doomed to repeat it. This problem is getting worse, each month.
Just try to think that in December, alone, over 1 million houses were foreclosed. Over one million families lost their homes. More than one million more coming in January. Millions of people now living poor.
Topics: Housing, Loans, News, Personal | 1 Comment »
Empty Houses
By Tom | December 22, 2007
A report coming out of France that tells us how the “housing crunch” is hitting lower to middle income families in the US. The report focuses on just one small part of Cleveland, OH. This is a more in-depth report than I’ve seen anywhere, here in the US. This video may have been removed from the site that it was hosted on. I’m leaving the file information here, for now. If I find another version, I’ll update this post.
Read the rest of this entry »
Topics: Economy, Housing, Loans | 5 Comments »
I Don’t Want This To Sound Bad
By Tom | December 21, 2007
… although I know it probably will, no matter how I say it. When I was a kid, our Christmas’ were huge. Presents for my brother and I would cover most of the living room floor.
Today, I came across this story from a MA newspaper, online. The story was titled “Parents of five work within budget but have little extra“. It explains how Jessica and Sam do the best they can to keep their family “above water” and that this time of year is especially tough on them. The story ends by telling readers how they can donate to the “Santa Fund”, so that their kids will be able to enjoy opening a few presents on Christmas Day.
I truly hope that a lot of people donate to this and that Jessica and Sam’s family have a wonderful Christmas!
What I wish the story would have pointed out or at least called some attention to is the fact that there are many, many other families that are in the same exact situation. The sad truth is that their story is far from unique, and in fact, very common. Whether families have 5 kids or 1 or 2, there are still many who struggle from paycheck to paycheck, trying to pay all of the bills. Lately, with the rising cost of almost everything, everybody’s budget is getting tighter and tighter.
Most people are very proud, and feel very bad accepting help from other people. It’s really just a part of human nature. People will put on a false front and try to make things look okay from the outside because they don’t want other people to realize just how hard things are getting. The fact is that the things that are happening in today’s economy are affecting everybody. It doesn’t matter if you’re making $90,000 or $9,000 a year… the rising cost of food, fuel, household products, and just about everything else has everybody trying to stretch their money as far as possible.
The only real point that I wanted to make is that these kinds of stories and reporting are far too few. News outlets can report on the housing crunch and a falling stock market, but the real stories about the many individual families and the way this economy is taking it’s toll on them are left out. Probably not because of the reporters, but because of people’s pride, and not wanting to “seem” like things are as bad as they really are.
Topics: Economy, Help | 1 Comment »
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