Places to Look for a (Cheap) Home

As a native of Cleveland, Ohio, I was dismayed by the devastating portrait of the city’s flat-lining real estate market in Sunday’s New York Times. Flippers and other opportunists continue to be propped up by laws in their favor and banks who pull a “what, me?” shrug instead of stepping up to responsibility. Foreclosed on and abandoned homes have turned some neighborhoods into ghost towns. Cleveland is said to be a bellwether of the teetering real estate market.

It turns out lots of places are like Cleveland, with home values underwater. Business Week has identified some of them as targets for aspiring homeowners.

Out on the Street: The Real Credit Crisis

Each week, “Joe the Trader” chronicles his experiences with life after Wall Street.

While it was old news, I was still left speechless by the article a fellow member of the He-Man’s Unemployment club recently sent to me. In early January, Newsweek published “The Case for Walking Away,” in which the author suggests that 2009 is the year to file for personal bankruptcy.

Don’t wait until it’s too late, the article advises. Indeed, “the right time to file for bankruptcy is when you’re financially stuck but still have assets to protect.” It is truly a sign of the times when a major news magazine is actually advocating such a thing.

The word credit is derived from the Latin credo, “to believe.” If integrity goes who will believe anybody? The current situation is truly a crisis of credit.

Recession Dispatch from… Asheville, N.C.

ASHEVILLE, N.C.–It can be easy to forget about the economy’s collapse when you live on top of a mountain. But even from a lofty perspective, it’s hard not to see the storm clouds gathering, promising to deliver to rain down some bad news on my adopted hometown of Asheville, NC. Aside from a growing number of “for sale” signs and the more frequent restaurant closings, it’s hard to see any real dramatic impact on the local economy – yet.

Recession Briefing 3.5

What you need to know today to survive and thrive in the recession.

The U.S. government has begun a program to provide help for distressed homeowners owing as much as $729,750. Mortgage payments for many will be reduced by as much as $1000 a month. (New York Times)

GM is warning that is faces possible bankruptcy if more government funds are not forthcoming. In order to get more, the company needs to convince the Treasury Department that it has a viable business plan. (Wall Street Journal)

February’s job loss numbers are expected to confirm fears of a deepening and prolonged recession. “Consumers and businesses are locked into a dysfunctional relationship, dragging each other down.” (BusinessWeek)

Recession Briefing 3.4

What you need to know today to survive and thrive in the recession.

The recession is hitting almost every part of the U.S., and job loss disproportionately harsh on those without a college degree. An interactive map shows county-by-county unemployment figures. (New York Times)

Loan Do-Overs?: The Obama administration will begin testing a program of mortgage modifications to let struggling homeowners pay less each month. (CNN/Money)

A new report finds that 19.8% of homeowners in the U.S. owe more than their home is now worth. (Time)

Dealing with Debt: Mortgages

In this economy, things change fast. One day you have job, the next you don’t. Companies fold within days. Investments evaporate.

In a recent story about how to handle a layoff, we suggested that you take a look at your finances—particularly what you owe—so that you can start planning. But that actually holds true for everyone these days.

Most of us have some sort of debt. And even if you have a job, the bonus you normally rely on to pay off credit card bills has probably shrunk or vanished. Freelancers and consultants still have student loan obligations, even as their gigs are being cut. Many people are taking salary reductions, but continue to carry mortgages. And just how secure is your job, anyway?

Meanwhile, as credit markets shift at lightning speed, it’s not easy to find up-to-date information. So we’re doing it for you, compiling the most current advice on managing debt, starting with mortgages.

Lemonade Maker: James Young, Digital Prospector

Profiles of people who are seeing opportunity in a pile of economic lemons.

James Young
East Hampton, N.Y.
Before recession: Commercial real estate broker
Now: Co-founder of Rosehip Partners, a Hamptons real estate business

In the Hamptons, one of the most privileged parts of the country, the real estate boom is firmly at an end. The number of sales was down 40 percent in 2008. Prices are being slashed on multi-million-dollar mansions. Lavish spec houses sit empty.

It would seem like the worst possible time to start a real estate company. But last summer, James Young and Joe Kazickas founded Rosehip Partners, an agency that covers the east end of Long Island, from West Hampton to Montauk. In September, as the recession was gathering speed, they unveiled their website, HamptonsRentals.com.