I felt like relating my story to show that it's not only deadbeats and drug addicts who bought more than they could afford who are suffering from this housing market problem.
The woman and I have pretty nice income. We save upwards of 70% of our income too, since our rent isn't terrible and we don't spend high. We've got plenty in the bank, and both are jobs are pretty stable.
But, where we rent, the owners are in trouble. Job loss and such forced them into looking for a refi, and the bank approved it 2 weeks ago. Now they turned it down because the LTV went down in the past 2 weeks. The bank asked for another couple K, and for a couple that just had their income decrease, that'll be hard on top of the 60k they already gave the bank to refi.
We live in Newark. I love my Newark, and I don't care about all the negative publicity. However, to rent in my part of Newark is next to impossible. Every place is always taken, and the ones that aren't are really old places that weren't maintained right. Our current apartment, I love very much, but if I am forced to move, I will have no choice but to move to a much higher rent area, like Newport in Jersey City, to maintain the quality of environment, or I will have to settle for a worse place. Unfortunately, we're right on the tip of having a nice down payment available to put down on this house we want in my neighborhood.
It is builder owned, since he hasn't been able to sell it, and he's asking a price in line with the values from 2007. Since the rest of the neighborhood has lost almost 40% in home values in the past couple months, his $600k asking price is highly unreasonable right now and we refuse to pay it.
While we could easily afford to move to a higher rent location, this would also take us away from the cultural aspects of the neighborhood we live in, as well as take me away from former students of mine that I still mentor and advise at my alma matre.
I'm not complaining one bit however, as there is always food on our table, gas in our tank, and money stacked up in case of any unforeseen event. I personally feel, and my fiance agrees, that we would have no problem taking a more significant tax hit on our income IF it went towards the right causes and we weren't the only economic class footing that bill.
I don't expect people who bust their humps making minimum wage in high cost-of-living areas to foot the bill. Taking $1000 from me would hurt me less than taking $100 from them, or even $10 from them. I also don't expect the highest of earners to front the bill, because taking most of their money isn't fair if I get to keep half of mine. However, I believe the mentality that "successful" people don't owe anyone anything is unfounded.
We all rise to success in the shadow of others, and we all cast a shadow on others in our rise to success. Every time a 25 year old bags my groceries at Shoprite, I don't say they have that job because they didn't put in the work to get to where I am. I say they have that job because the system requires them. If everyone could be rich and have high paying jobs, who would do the common laborer jobs, the dirty grunt work, the unappreciated burger flipping and fry hopping and bag packing and street cleaning and trash dumping, to name a few examples.
I never look at anyone as less than myself or more than myself. Even in my worst of times, I have felt that I am blessed to simply be here, breathing and able-bodied. When I discussed the housing situation with the home owners, who are now my good friends, I told them to let me know if I can help somehow. Not because I have to, but because I am fortunate enough to be able to.
It doesn't matter how anyone got into this mess. We can all get through it, every single one of us, if we all, every single one of us, take our responsibility to each other seriously. No one should be quick to judge another unless they have walked in that other pair of shoes, and even then we should stray from doing so.
A quick example of what I think. A good bud of mine said that no one should be in this situation, and they shouldn't have spent beyond their means. I asked "But bud, what if they lost their jobs?" His response was "They should have saved up enough to sustain themselves until they find a new job. I keep a year's worth of salary saved at all times in case it happens to me."
I asked him "But what if you lose your job for more than a year?" He said "That'll never happen to me."
That, right there my friends, is the base problem. The belief that "it could never happen to me." It can happen, to any of us, at any time. Rest their souls, there were people standing and sitting in 1 WTC on 91101 that never thought they would watch a plane come barreling right into the building they were in. There were people that saw it happen, right in front of their very eyes, and never thought they'd watch two 106 story buildings collapse floor by floor. I could go on, but no.
We're all in it together, from the children fishing for food scraps in a stream of raw sewage in the middle of Sudan while their parents corpses rot in an open mass grave to the billionaire venture capitalist eating caviar and flying around the world in private jets.
