Bulldozing homes 60 minutes

[Albion]

Howdy after watching homes being demolished last night i am confused. These are good homes. Knocking them down is such a waste. Abandoned without a sheriffs sale then destroyed to try an boost other homes values....

It just goes against my grain . So many people out of work. Out of homes and such a rich country. This is the best we can do?

Yikes . Buying them for $1.00 and putting unemployed youth to work renovating them and selling them at the newer lower value. Building these young people by training and getting a pay check. Sure its helping them an others whom could then afford the lower house payments. Strengthing the communities? If i heard it right just in the county 21000 including the 1,000 already destroyed - shame on where we as a people have come to. The great depression what did they do then? My frugal parents kids then survived - did not waste they built or maintained. 50 million Americans now living in poverty. Whats the legacy becoming?

[Ted S.]

Why are they being bulldozed, what show were you watching?

[Martin Holladay]

Cleveland, Ohio:
http://www.cbsnews.com/8301-18560_16...-neighborhood/

[Ted S.]

Well it is a waste indeed, but I have to confess, pretty much every house I go into these days makes me want to puke. I hate wood framing. I think we in general build junk in the US. Sustainable?.. my azz. There simply isn't enough dumpsters to go around as far as I'm concerned.

I''l take an ICF house with SPF roof, 100 year stucco and stone, operational insulated shutters. Passive House all the way up until the certification...

[Bill Robinson]

Why are they being bulldozed, what show were you watching?

IMO they were being bull dozed because the banks saw more profit from letting them sit idle than putting them to use.

And there were likely the usual misplaced title docs.

And it is all about the money.

The banks are walking away from their mess.

[Ted S.]

IMO they were being bull dozed because the banks saw more profit from letting them sit idle than putting them to use.

And there were likely the usual misplaced title docs.

And it is all about the money.

The banks are walking away from their mess.

Bill,

I have a tough time understanding this strategy by the banks although you are saying what I have heard before. I don't understand how they are getting ahead financially by destroying the homes, you would think if they could sell them for 10 cents on the dollar even that would be better then a tear down?

[Slaughter Construction Co]

It's like the dairyman dumping his milk on the ground or the farmer plowing under his crop. It's all about the money, and the principle of supply and demand. It doesn't matter that folks/kids go to bed hungry or in the case of houses, have no place to live.

From a business standpoint, it better for the banks to bulldoze/get them off their books than to reduce the principle/interest and let folks stay in their homes. They have become more trouble than they are worth. We the people,Freddy and Fanny, have guaranteed the loans anyway, so the banks get their money don't they?

What puzzles me, is how all the poor dumb home buyers, tricked all these smart bankers into loaning/giving them all that money without firing a shot. Bonnie and Clyde must be turning over in their graves.

[Ted S.]

What puzzles me, is how all the poor dumb home buyers, tricked all these smart bankers into loaning/giving them all that money without firing a shot.

From what I saw the bankers were begging to find deals.

[worthy]

In this case, it is the municipality that is doing the bulldozing because the houses aren't even worth the cost of the demolition. In other instances, lenders have been tearing down entire sub-divisions.

Good on all of them!

It is the Washington octopus and its bi-partisan pandering to the fantasy of every American a homeowner that was at the root of the problem. Easy money. Ludicrous lending standards and no regulation of the securitized assets created. All creations of the pols, the Fed and their bankster buddies. The sooner there is an adjustment to genuine market demand, the better.

Along the same lines as Cleveland, is Detroit, where vast swathes of the city are being converted into fertile farmland.

[m beezo]

I still want to know where everyone from those homes are going to live now. 20,000 homes, even if only one person in a home is still 20,000 bodies that need a place to live, buy groceries, support schools, get gas, etc. Where are they all now?

Other thing I don't understand is the reverse thinking. Or so it seems to me. Anytime that some developer comes into an area and proposes building a 200 or 500 home subdivision they all talk about how it is going to impact the economy for good. Will provide 5000 jobs directly and 10,000 indirectly, will provide a tax base, will make the fast food resturant increase it's revenue, all the other stuff, bring in millions of dollars of value to the place.

Yet when they decide instead of working with the current homeowners they let them walk away and then knock down the houses. They loose any purchase power those homeowners might have brought to the area which helps deflate the value of the area. And while the idea of giving the vacant lot to the next homeowner sounds nice but that would probably increase the property taxes on a home that may already be close to being in trouble.

I should say that I do not believe it is all the fault of the banks or lending places. I personally know 2 families who have had foreclosures. I am not a financial genusis but I knew from the beginning that one family would be in trouble and could not believe how they got a house to begin with. They had already lost a car but somehow got a house. They did not seem to learn. They just seem unable to do basic math of if you spend $100 you need to be able to replace it with $100 or you are soon in trouble.

[Bill Robinson]

Bill,

I have a tough time understanding this strategy by the banks although you are saying what I have heard before. I don't understand how they are getting ahead financially by destroying the homes, you would think if they could sell them for 10 cents on the dollar even that would be better then a tear down?

Yeah, me too!

I also have a hard time understanding the derivatives and other instruments that were used to help the current fiasco along.

What I do know is that the money manipulators will mostly-nearly always come out on top.

I think all you need to do is to come up with an idea and if enough others will go along with it you are good to go.

Like clicking your heels but with a much better financial return.

Please don't get me wrong, I like money as much as anyone.

It is this damn Midwestern sensibility always getting in the way.

[Bill Robinson]

I should say that I do not believe it is all the fault of the banks or lending places.

Beezo, it used to be you could trust the bank.

Especially the local ones where the managers and owners were likely to see you at the diner or grain elevator or HS football game.

You could pretty much trust those folks, they were part of the community.

That has changed but I believe until recently most folks trusted the banks and bankers.

Anybody who trusts a bank these days is easily taken.

I imagine most of the people who were put in homes they could never afford figured the bank knew more than they did.

And that was true to some extent.

Problem is the bank did not tell what they knew.

[m beezo]

Beezo, it used to be you could trust the bank.

Especially the local ones where the managers and owners were likely to see you at the diner or grain elevator or HS football game.

You could pretty much trust those folks, they were part of the community.

That has changed but I believe until recently most folks trusted the banks and bankers.

Anybody who trusts a bank these days is easily taken.

I imagine most of the people who were put in homes they could never afford figured the bank knew more than they did.

And that was true to some extent.

Problem is the bank did not tell what they knew.

I agree with just about all of what you said. Which is part of the reason I bank at a small bank in St Louis. I know many of the folks there, at least well enough to talk to them when I meet them outside the bank.

And I also will say that I hope the banks know more than I do. I still do not understand interest, how you can mortage things over and over and still get the bank to loan you money, use this unpaid off house to buy another and another. The banks to me are often like the tax guys. They know that it does not make sense but it can be done and they will show you how to do it.

What I don't understand is the lack of common sense. I cannot figure out where we forgot basic math that if I don't have $20 in my pocket or on my credit card or in the bank why I load up a grocery cart with $100 worth of groceries. Or in the housing sector if I am only making minimun wages and have been for the last 10 years think that I can suddenly afford a house that would require 5 times as much in wages as I am making. Sure I am sold on the "hope" that my wages will increase, that my rich uncle will leave me his money, or I will win the lottery and everything will be cleared up. But common sense tells me that just does not happen very often.

I do not need a bank to tell me I cannot afford to do certain things, all I need to do is look at a few balances of what is there now, what is coming in and what is going out. Simple math tells me I cannot afford some things and others I can, no matter what a bank might tell me.

[GaryJR]

"What I don't understand is the lack of common sense. I cannot figure out where we forgot basic math that if I don't have $20 in my pocket or on my credit card or in the bank why I load up a grocery cart with $100 worth of groceries."

Because you can and the banks understand human nature and use it to their advantage They make it easy for you to over spend.

The housing market is still over priced, it still needs to come down. It's not coming back to where it was because it never should have been there in the first place.

[m beezo]

[QUOTE=GaryJR;640932

The housing market is still over priced, it still needs to come down. It's not coming back to where it was because it never should have been there in the first place.[/QUOTE]

One of my concerns about the housing market continuing to come down is what else that affects. How you going to pay your employees or yourself if suddenly housing gets adjusted even more. I am aware of folks who considered before the economy tanked that the cost of doing business was too much and it is even worse now. Most cite the ecomony as why they are shocked at what things cost and put off work on their homes. It seems to me that if the cost of a house is out of line the wages that it takes to build those houses were probably out of line also. You willing to give up part of your wages?

And as far as what a house should cost, whether new or old, is what has come down cost wise in the materials it takes to build a house. Some things may have come down some but nothing I am aware of has come down the same percentage that the price of a house has come down.