Sunday, July 17, 2011

Bankruptcy Won't Work

A member raises his hand at a meeting and asks the question: if the association is too broke to pay its bills, why not simply declare bankruptcy? Hold the creditors at bay until the economy picks up? No one on the board has a good answer because it almost never happens. Here are the practical and legal reasons why...

Monday, July 11, 2011

Getting Sober in the New Economy

Are Rentals a Better Solution for Affordable Housing?

"The crux of (the) analysis is that the loose lending practices seen during the housing bubble allowed 5 million renters to become homeowners and the market is in the protracted process of evicting this group."

Sometime in the early sixties, a large California developer opened its first development of condominiums for sale. They were offered at rock bottom prices. A home for a single family that could be bought for $10,000.00 was big news even then. The desire for suburban housing that could be built in high densities and thus be affordable was apparent. Condos could be sold in volume which meant higher profits for home builders. Other developers followed suit, and condominiums became a ubiquitous part of the national real estate market. Those home buyers who could not afford a single family home on its own lot could still get in on the real estate ownership bandwagon. Low interest loans backed by the government gave many low and moderate-income wage earners the opportunity to purchase a home. Most people could buy with 5% or no money down. Veterans could buy a new home for nothing down. Condominiums, and their planned development cousins, became the darlings of the real estate industry and they were constructed by the carload.