NYTimes: Cul-de-Sac of Lost Dreams...

[IACRenter_IHB]

I read this great article in the NY Times today that chronicled the struggles of the housing market in one cul-de-sac in Morreno Valley. Sad but interesting stuff to read. This housing bubble deflation has hurt a lot of similar communities around the country.



<a href="http://www.nytimes.com/2009/08/23/us/23bethone.html">http://www.nytimes.com/2009/08/23/us/23bethone.html</a>

 

[freedomCM_IHB]

what is nice is that they didn't blame "the banks", but instead detailed how they all used their houses as ATMs, and that was their downfall.

 

[roundcorners_IHB]

Berth Court... looks like a good mix of old and newer homes,,, much rather pick up something build after 2005, on the lake for under $100K...

 

[ABC123_IHB]

this is the saddest part of the article:



<blockquote>But the newcomers have arrived with different ways. One started a petition against the ice cream truck because of the noise. Another waved away a longtime resident coming to welcome the new family. So far, not one has joined the neighborhood watch association.



The blockwide birthday parties, neighborly fence-building and Friday chitchat sessions at dusk have become fragile antiques of the preforeclosure days as the new neighbors keep to themselves and the old-timers struggle to keep their footing. The street is staggering toward recovery, but for every step forward, there are three back.</blockquote>

 

[bkshopr_IHB]

The social implication of neighborhood newbies coming in waves lead to social outcast and isolation. Neighborhoods with flipping and investment/ renting activities often created barrier and anger among the old timers that their RE is being affected in ways that they can't control.



You can say all you want about how friendly neighbors like RC could be welcoming new comers to his neighborhood block and how Panda is trying to reach out all the way from Chicago. Neighborhoods with investment opportunity will rarely sustain the neighborhood bonding that we see in movies or read in stories.





Human behavior and defense mechanism don't change unless there is a common goal and comradery. Take IHB neighborhood for example unless the newbies have very thick skin they don't stand a chance making to the block party.



What are these common goals? In Los Angeles old neighborhoods ban together to fight neighborhood burglaries through getting to know each others and their home habit and vehicles people drive. Any suspicious unusual activities could be easily spotted. Older neighborhoods rely on curb appeal to boost its home value so owners tried their best to maintain their front yard and home.



When a neighborhood does not have this common goal such as fighting crime and depreciating home value residents get to comfortable relying on the HOA to maintain curb appeal, developer to introduce new homes that automatically raise comps, and no need to validate the cars that really belong to the neighborhood except of course keeping score of the parking violator and snitching on neighbors breaking the CC&R rules that eventually escalate to resentment.

 

[Anonymous_IHB]

Actually, its an interesting article from a psychological point of view. Ask yourself:

-among the bubble buyers (and home equity withdrawlers), did they seem more trusting of other people in general (ie. neighbors & RE agents & bankers, etc) and were they more likely to put a higher emphasis on following the herd (ex. fitting in, having reciprocal parties, doing favors, etc but also more likely to buy a house with little down or heloc to renovate or buy a car because everyone else was doing it)? Did they seem more likely to be optimistic and not worry about risk too much?

-among the new buyers, who by definition chose to rent rather than buy with nothing down, are they less trusting of other people in general (ex. wary of neighbors who offer repair help but that may try to use that as leverage later to claim joint success or be dominant, and of bankers/RE agents telling them that buying more than they can afford is ok). Is social acceptance less important to them (ex. don't care if other people think badly of them for not buying a house earlier, or not following the "neighborhood rules" others set before)? Are they more pessimistic and more risk adverse? Was self-reliance (ex. saving their down payments rather than relying on credit that may be withdrawn) more important to them?



It's an interesting tale from that point of view. And the reaction of the self-appointed "mayor" seems entirely predictable when you replace the first group with the second group ...

 

[Geotpf_IHB]

Here's a rebuttal to the New York Times piece by the Village Voice:



<a href="http://blogs.villagevoice.com/runninscared/archives/2009/08/the_times_picks.php">Link</a>



Basically, their argument is that Moreno Valley is such a dump that it's a bad example to use to describe the housing crisis.

 

[no_vaseline_IHB]

The comments there are pretty epic. People are awful proud of thier [del]shithole[/del] community of Moreno Valley.

 

[Oxtail_IHB]

Moreno Valley is a sh*thole, but those are the places the housing crisis hit the hardest. Like if you were writing a story about the dot.com crash, you would probably go to Sunnyvale and not Burbank. Nobody would really want to read an article about what the aerospace and defense coallpse in So Cal was like back in the 80's from the point of view of a radiologist.



Besides, I find reading about the people in Moreno Valley more interesting than reading about the RHOC.