Thursday, February 28, 2013

Noticing Disturbing Trends

Empty houses don't stay this nice for long. It's surprising how quickly a house which is not being checked or maintained deteriorates.
            


   We live deep in the country where barns are common, and large acreage and forests are the norm. I mentioned this trend some time ago, but it is a trend which is continuing. When I make my weekly trips to pharmacies, or the distant trip to Sam's Club every couple of weeks, I have been noticing that more and more people are moving and leaving their homes empty.  Why does this happen ?  Well in many places, people disappear when they choose not to rent somewhere anymore. However, in our area, there are very few rentals, and so the homes being abandoned are not generally the rentals.  Sometimes people leave when they lose a job and find another one elsewhere, and could not sell their home. Homes are averaging a year on the market, and so sometimes people must simply move to another state, to a new job. They, in essence, abandon their home and their responsibility to pay its mortgage. Quite a few months later, the bank forecloses, and then makes attempts to sell the home.  You might think that this is a great way to pick up a house at a low cost, but it really isn't.  Our daughter spent a year visiting all the local foreclosures trying to buy a home here. What she found was that banks who often felt very stuck by having someone who owed two hundred and fifty thousand dollars on a home, were not at all likely to accept that the home they now own, has a roof leak and may now be worth about ninety-thousand dollars. Rather than cutting their losses, many of the banks see these sales as a chance to recoup losses.  The result are homes and farms which stay vacant for a long time and fall into significant disrepair, even if they were constructed within the past five years or so.  Our daughter finally found a home, but she did not purchase from a bank.  It is disturbing to note more and more people moving away, as they cannot pay mortgages on a home they once loved. The result is a county who charges taxes to someone, likely a bank, and then who finds that a property that was at one time assessed at a high rate, is now worth much less.  Our county has seen a consistent devaluation of many properties during this recession. Some of the luxury homes have been up for five years or more. The owners cannot take a huge amount less for them, because a large mortgage is owed. They simply cannot take less than the mortgage owed, because then the property cannot be conveyed to someone else, without the original mortgage being cleared. Locally, banks haven't been too willing to receive less than the mortgage amount, even by a couple of thousand dollars in order to convey the property to someone else, and get a loan which is in trouble off their own books.

This trained horse which is registration eligible is for sale for $800. in a county nearby. She is only five years old.


                The other trend which is happening here, concerns the animals.  In the past eighteen months, costs to feed our animals have doubled.  Cornmeal has skyrocketed in costs, as has hay and other staples for animals. My husband believes that it costs us five hundred dollars a month to feed all of our animals.  This trend has caused people who own horses to sell as many of them as they can.  It has caused people with alpaca farms to liquidate completely.  There are also many ads, where someone with farm livestock is selling their animals, pigs, calves, etc. for a particular price, but if you have a good home which meets their requirements, then they will make a gift of the animal to you. I cannot tell you how many Quarterhorses, Percherons, donkeys, or others have been offered to us free of charge recently. People simply can't pay feed costs, veterinary costs, farrier costs, etc.  Although I would like to get a miniature horse at some point, I cannot take any animal for which I don't have pasture and housing specifically arranged, and arrangements for equine veterinary care and farrier care. I am thankfully not aware of trends indicating that animals are being abandoned here.  Thus far, when people must leave, they have made arrangements for their animals.
           I have no idea whether my area is unusual or whether this is occurring in other rural areas across the country. We are told that an improvement in construction trends is being seen.  It hasn't reached here yet.  I hope things are better where you are.


14 comments:

Sunnybrook Farm said...

We live in rural franklin county virginia and around us the empty houses are usually old farmhouses that are too expensive to heat or repair. Of course the barns are falling down as well. Lots of buildings get torn down to avoid taxes. We have a percheron cross that I got to plow with and he eats a lot but I cut his hay with a scythe and put it up loose. It takes about 17 pickup loads per winter but he wastes hardly any as it is so good of quality.

JaneofVirginia said...

We also have our share of the older farm houses, but they tend to fall in a few years. There is quite a county fee for a license to demolish a building, and so often the churches will take a building apart overnight, and salvage all the materials, as a gift to an elderly member who can no longer pay the taxes on a barn or a home which is coming down soon. By daylight, no one knows anything. Building ? What building ?

russell1200 said...

In North Carolina a lot of the county real estate records are public and online which lets you track a little better what is going on.

We are in the area where the finance people have felt its a good idea to buy up single family homes as rental investments.

The problem with the banks is that they don't want to "realize" the loss on their balance sheet. Too many losses, too quickly means that they are insolvent, and more importantly, won't be giving out big bonuses. So they play games. The only reason there is a surge in housing is that stock is still held off the market, and the builders are going back to the easy finance of the boom years.

JaneofVirginia said...

Exactly. So any "recovery" in the housing market is actually "smoke and mirrors". Judging from where I am, there is no recovery, and more people who choose to leave their houses, to come.

Gorges Smythe said...

Any "recovery" is at the top; The little guy is worse off than ever. We have a lot of empty homes around here, too, and at all price levels. I think it's all over, but varies by area.

JaneofVirginia said...

Thanks Gorges, I wonder if such a recovery exists at all.

Sunnybrook Farm said...

They haven't thought about taxing on tearing down buildings here yet. When I build something like a chicken coop, I put it on an axle and wheels no matter that it doesn't move, it is a farm wagon and not a building.

JaneofVirginia said...

Locally, they don't tax buildings without foundations here. However, many times the larger farms, which is principally what we have here, have multiple houses. People with large acreage who were career farmers had a house for the family, and a house for their parents a distance away, and perhaps a house for an aunt. (My farm had five houses and a barn at one time.) These houses can be really quite nice or less than attractive, and a few are hazardous. In this era, it is not uncommon for the family house to be occupied, but after the farmer's parents have passed and the aunt has passed the homes sit empty. There is no work here, and so no one rents, nor do they want the possibility of having rented to perhaps a drug dealer who wants that measure of privacy. Still, the two "extra homes" come with quite an extra tax bill, usually several thousand dollars annually. If the church comes by and does a stealth night demolition and gives everything salvageable to Habitat for Humanity's Recycling store 50 miles away, and then has the county out to inspect that "those two extra houses collapsed and were removed a long time ago", then the family can save 2-3K a year on taxes. This also saves the thousand dollar plus fee for each homes demolition permit. This can make the difference between the family being able to afford to remain on the farm in their old age, and their needing to sell it, in a terrible time to do so.

Mamma Bear said...

Jane..I tried to send you a comment through your book promotion site and it did not go through (at least on my end) I got the dreaded 404 error code

JaneofVirginia said...

Mamma Bear, Sorry about that. The book publisher manages the BUY IT HERE site and I don't have any control over it. The cheapest place to buy the book is, and has always been Amazon. I am more interested in getting the book out there, than in maximizing what little profit I might get. You can send me comments here, or by clocking "Send feedback to me" above. If that doesn't work, then it's a blogger glitch and should be fixed fairly quickly. Thanks for your post !

Kristin said...

It's going on here too. The 2 houses closest to me have both been foreclosed on. I'm sure that doesn't help my value at all. It's a good thing I'm not planning to sell.

As for the feed costs...tell me about it! Chicken feed got so high I am raising the prices on my broilers and eggs just to turn a profit. I know people are strapped and I have held off as long as I can, but I am not running a charity.

JaneofVirginia said...

No you're not, and you have to make some money doing it. I suspect my duck eggs are more cost effective than my chicken. Do you think there is a market where you are for duck eggs ? I add chives and a little cheese to mine, and they make great omelets, quiches and cakes.

Kristin said...

People seem skeptical about the duck eggs. We end up eating them.

As for making money doing it...that's a novel concept. $3.50 lb may seem expensive unless people realize that I spend a small fortune on feed, move them, feed and water them twice a day for 8 weeks then recruit 3 other people to spend an entire day butchering. Then there's the cost of the tractors, plucker, shrink bags and ice. For all that, I make about $280 on 30 broilers. Makes me wonder if it's worth it.

JaneofVirginia said...

Kristin, Yes, a lot of people think that the duck eggs taste gamey and whether they have tasted them or not, they don't eat them. This is foolish because with onions and cheese they make fabulous omelets and quiches. I actually freeze the quiches after cooking to eat later. Some of the African American families like to pickle the duck eggs, as it's apparently a regional delicacy here. I actually prefer to cook with duck eggs. With higher protein, they produce a much higher lighter cake.