[bsrsharma]

Continued mortgage interest deductibility and Capital gains tax exemption come to mind. May be raising GSEs conforming limits? Subprime purchase by GSEs?

[bsrsharma]

Continued mortgage interest deductibility and Capital gains tax exemption come to mind. May be raising GSEs conforming limits? Subprime purchase by GSEs?

[bsrsharma]

Buying A House In 1906

(c) copyright View from Silicon Valley, 2007. All rights reserved.

Killing time on vacation last week, the local book store’s “classics” section beckoned. After considering “Moby Dick” and a couple others, Upton Sinclair’s “The Jungle” was the winner.

Sinclair describes life in the Chicago meat-packing district, originally built in 1864, by the Beef Trust (today’s Armour and Swift companies). Published in 1906 as a novel, “The Jungle” is widely viewed as the impetus behind President Teddy Roosevelt’s establishment of today’s Food and Drug Administration.

A story within the story describes the protagonist family’s purchase of a house. The parallels between 1906 and 2007 are startling!

As usual, comments and emphasis are added.

* * * * *

The Jungle, Chapter 4:

Their good luck, they felt, had given them the right to think about a home; and sitting out on the doorstep that summer evening, they held consultation about it, and Jurgis took occasion to broach a weighty subject…

…The center of the placard was occupied by a house, brilliantly painted, new, and dazzling. The roof of it was of a purple hue, and trimmed with gold; the house itself was silvery, and the doors and windows red. It was a two-story building, with a porch in front, and a very fancy scrollwork around the edges; it was complete in every tiniest detail, even the doorknob, and there was a hammock on the porch and white lace curtains in the windows. (The ads always looks “charming” or “cozy”) Underneath this, in one corner, was a picture of a husband and wife in loving embrace; in the opposite corner was a cradle, with fluffy curtains drawn over it, and a smiling cherub hovering upon silver-colored wings. (Attempting to induce nesting emotions for buyers into what is only a business transaction for sellers.)

For fear that the significance of all this should be lost, there was a label, in Polish, Lithuanian, and German – “Dom. Namai. Heim.” “Why pay rent?” (sound familiar?!?) the linguistic circular went on to demand. “Why not own your own home? Do you know that you can buy one for less than your rent? We have built thousands of homes which are now occupied by happy families.” (familiar again?) – So it became eloquent, picturing the blissfulness of married life in a house with nothing to pay. It even quoted “Home, Sweet Home,”…

…It appeared that this house contained four rooms, besides a basement, and that it might be bought for fifteen hundred dollars, the lot and all. Of this, only three hundred dollars had to be paid down, the balance being paid at the rate of twelve dollars a month. (They’re actually putting 20% down? What suckers! After that, it’s, 100 months, or eight years and four months, at $12 /month.) These were frightful sums, but then they were in America, where people talked about such without fear. They had learned that they would have to pay a rent of nine dollars a month for a flat, and there was no way of doing better, unless the family of twelve was to exist in one or two rooms, as at present. If they paid rent, of course, they might pay forever, (Conveniently overlooking the fact their $9 rent is less than a $12 house payment.) and be no better off; whereas, if they could only meet the extra expense in the beginning, there would at last come a time when they would not have any rent to pay for the rest of their lives.

…If they all combined, they would have enough to make the first ($300 down) payment; and if they had employment, (sound familiar?) so that they could be sure of the future, it might really prove the best plan. It was, of course, not a thing even to be talked of lightly; it was a thing they would have to sift to the bottom. And yet, on the other hand, if they were going to make the venture, the sooner they did it the better, for were they not paying rent all the time, and living in a most horrible way besides? Jurgis was used to dirt – there was nothing could scare a man who had been with a railroad gang, where one could gather up the fleas off the floor of the sleeping room by the handful. But that sort of thing would not do for Ona (his wife). They must have a better place of some sort soon – Jurgis said it with all the assurance of a man who had just made a dollar and fifty-seven cents in a single day. Jurgis was at a loss to understand why, with wages as they were, so many of the people of this district should live the way they did.

…The houses lay to the south, about a mile and a half from the yards; (a fairly remote suburb when you have to walk, in Chicago’s winters and summers, both ways, every day) they were wonderful bargains, the gentleman had assured them – personally, and for their own good. He could do this, so he explained to them, for the reason that he had himself no interest in their sale – he was merely the agent for a company that had built them. These were the last (“They’re not making any more land!”) and the company was going out of business, so if any one wished to take advantage of this wonderful no-rent plan, he would have to be very quick. (“Act now or be locked out forever?”) As a matter of fact there was just a little uncertainty as to whether there was a single house left; for the agent had taken so many people to see them, (“We have other buyers”) and for all he knew the company might have parted with the last. Seeing Teta Elzbieta’s evident grief at this news, he added, after some hesitation, that if they really intended to make a purchase, he would send a telephone message at his own expense, and have one of the houses kept. So it had finally been arranged – and they were to go and make an inspection the following Sunday morning.

That was Thursday; and all the rest of the week the killing gang at Brown’s worked at full pressure, and Jurgis cleared a dollar seventy- five every day. That was at the rate of ten and one-half dollars a week, or forty-five a month… Marija and Jonas were each to pay sixteen dollars a month board, and the old man insisted that he could do the same as soon as he got a place – which might be any day now. That would make ninety-three dollars. Then Marija and Jonas were between them to take a third share in the house, which would leave only eight dollars a month for Jurgis to contribute to the payment. So they would have eighty-five dollars a month – or, supposing that Dede Antanas (“The old man”, whom nobody wanted to hire.) did not get work at once, seventy dollars a month – which ought surely to be sufficient for the support of a family of twelve. (At least they recognize they still need to eat.)

An hour before the time on Sunday morning the entire party set out… It proved to be a long mile and a half, but they walked it, and half an hour or so later the agent put in an appearance. He was a smooth and florid personage, elegantly dressed, and he spoke their language freely, which gave him a great advantage in dealing with them. (Specialized agents prey on people of their own ethnicity even today.) He escorted them to the house, which was one of a long row of the typical frame dwellings of the neighborhood, where architecture is a luxury that is dispensed with…

Still, it was freshly painted, and made a considerable show. (Buy, paint, flip –just like today.) It was all brand-new, so the agent told them, but he talked so incessantly that they were quite confused, and did not have time to ask many questions. There were all sorts of things they had made up their minds to inquire about, but when the time came, they either forgot them or lacked the courage. (Today we read, again and again, how buyer’s didn’t question their own agents.) The other houses in the row did not seem to be new, and few of them seemed to be occupied. When they ventured to hint at this, the agent’s reply was that the purchasers would be moving in shortly. (Vacancies are still a classic sign of speculators /flippers.) …

…The street in front of the house was unpaved and unlighted, and the view from it consisted of a few exactly similar houses, scattered here and there upon lots grown up with dingy brown weeds. (Brown yards are still a warning sign today.) The house inside contained four rooms, plastered white; the basement was but a frame, the walls being unplastered and the floor not laid. The agent explained that the houses were built that way, as the purchasers generally preferred to finish the basements to suit their own taste. (Same deal today, except you usually have to buy the finishing items from the builder.)…

There was no end to the advantages of the house, as he set them forth, and he was not silent for an instant; he showed them everything, down to the locks on the doors and the catches on the windows, and how to work them. He showed them the sink in the kitchen, with running water and a faucet, something which Teta Elzbieta had never in her wildest dreams hoped to possess. (OK, that’s a little humbling.) After a discovery such as that it would have seemed ungrateful to find any fault, and so they tried to shut their eyes to other defects. (Today, they call this an “as is” sale.)

Still, they were peasant people, and they hung on to their money by instinct; it was quite in vain that the agent hinted at promptness – they would see, they would see, they told him, they could not decide until they had had more time. And so they went home again, and all day and evening there was figuring and debating. It was an agony to them to have to make up their minds in a matter such as this. They never could agree all together…

Once, in the evening, when they were all in harmony, and the house was as good as bought, Szedvilas came in and upset them again… He told them cruel stories of people who had been done to death in this “buying a home” swindle. (Today, we call it working for the house.) They would be almost sure to get into a tight place and lose all their money; and there was no end of expense that one could never foresee; and the house might be good-for- nothing from top to bottom – how was a poor man to know? (Even today, professional home inspectors miss obvious flaws.)

Then, too, they would swindle you with the contract – and how was a poor man to understand anything about a contract? (Same excuse used today by bankrupt buyers.) It was all nothing but robbery, and there was no safety but in keeping out of it. And pay rent? asked Jurgis. Ah, yes, to be sure, the other answered, that too was robbery. It was all robbery, for a poor man….

The controlling factor was that they could not stay where they were – they had to go somewhere. (A self-imposed crisis we today after people decide they don’t want to pay rent.) And when they gave up the house plan and decided to rent, the prospect of paying out nine dollars a month forever they found just as hard to face. All day and all night for nearly a whole week they wrestled with the problem, and then in the end Jurgis took the responsibility. … So he told them, and so in the end the decision was made.

…And so they went and told the agent that they were ready to make the agreement. They knew, as an abstract proposition, that in matters of business all men are to be accounted liars; but they could not but have been influenced by all they had heard from the eloquent agent, and were quite persuaded that the house was something they had run a risk of losing by their delay. (Today, the agents tell you there are other bidders.) They drew a deep breath when he told them that they were still in time.

They were to come on the morrow, and he would have the papers all drawn up…

* * * * *

Conclusion: There’s nothing new under the sun.

If you enjoyed this, please let us know. We could publish the rest of this housing story.

“The Jungle,” is available online at http://sunsite.berkeley.edu/Literature/Sinclair/TheJungle/.

[bsrsharma]

Buying A House In 1906

(c) copyright View from Silicon Valley, 2007. All rights reserved.

Killing time on vacation last week, the local book store’s “classics” section beckoned. After considering “Moby Dick” and a couple others, Upton Sinclair’s “The Jungle” was the winner.

Sinclair describes life in the Chicago meat-packing district, originally built in 1864, by the Beef Trust (today’s Armour and Swift companies). Published in 1906 as a novel, “The Jungle” is widely viewed as the impetus behind President Teddy Roosevelt’s establishment of today’s Food and Drug Administration.

A story within the story describes the protagonist family’s purchase of a house. The parallels between 1906 and 2007 are startling!

As usual, comments and emphasis are added.

* * * * *

The Jungle, Chapter 4:

Their good luck, they felt, had given them the right to think about a home; and sitting out on the doorstep that summer evening, they held consultation about it, and Jurgis took occasion to broach a weighty subject…

…The center of the placard was occupied by a house, brilliantly painted, new, and dazzling. The roof of it was of a purple hue, and trimmed with gold; the house itself was silvery, and the doors and windows red. It was a two-story building, with a porch in front, and a very fancy scrollwork around the edges; it was complete in every tiniest detail, even the doorknob, and there was a hammock on the porch and white lace curtains in the windows. (The ads always looks “charming” or “cozy”) Underneath this, in one corner, was a picture of a husband and wife in loving embrace; in the opposite corner was a cradle, with fluffy curtains drawn over it, and a smiling cherub hovering upon silver-colored wings. (Attempting to induce nesting emotions for buyers into what is only a business transaction for sellers.)

For fear that the significance of all this should be lost, there was a label, in Polish, Lithuanian, and German – “Dom. Namai. Heim.” “Why pay rent?” (sound familiar?!?) the linguistic circular went on to demand. “Why not own your own home? Do you know that you can buy one for less than your rent? We have built thousands of homes which are now occupied by happy families.” (familiar again?) – So it became eloquent, picturing the blissfulness of married life in a house with nothing to pay. It even quoted “Home, Sweet Home,”…

…It appeared that this house contained four rooms, besides a basement, and that it might be bought for fifteen hundred dollars, the lot and all. Of this, only three hundred dollars had to be paid down, the balance being paid at the rate of twelve dollars a month. (They’re actually putting 20% down? What suckers! After that, it’s, 100 months, or eight years and four months, at $12 /month.) These were frightful sums, but then they were in America, where people talked about such without fear. They had learned that they would have to pay a rent of nine dollars a month for a flat, and there was no way of doing better, unless the family of twelve was to exist in one or two rooms, as at present. If they paid rent, of course, they might pay forever, (Conveniently overlooking the fact their $9 rent is less than a $12 house payment.) and be no better off; whereas, if they could only meet the extra expense in the beginning, there would at last come a time when they would not have any rent to pay for the rest of their lives.

…If they all combined, they would have enough to make the first ($300 down) payment; and if they had employment, (sound familiar?) so that they could be sure of the future, it might really prove the best plan. It was, of course, not a thing even to be talked of lightly; it was a thing they would have to sift to the bottom. And yet, on the other hand, if they were going to make the venture, the sooner they did it the better, for were they not paying rent all the time, and living in a most horrible way besides? Jurgis was used to dirt – there was nothing could scare a man who had been with a railroad gang, where one could gather up the fleas off the floor of the sleeping room by the handful. But that sort of thing would not do for Ona (his wife). They must have a better place of some sort soon – Jurgis said it with all the assurance of a man who had just made a dollar and fifty-seven cents in a single day. Jurgis was at a loss to understand why, with wages as they were, so many of the people of this district should live the way they did.

…The houses lay to the south, about a mile and a half from the yards; (a fairly remote suburb when you have to walk, in Chicago’s winters and summers, both ways, every day) they were wonderful bargains, the gentleman had assured them – personally, and for their own good. He could do this, so he explained to them, for the reason that he had himself no interest in their sale – he was merely the agent for a company that had built them. These were the last (“They’re not making any more land!”) and the company was going out of business, so if any one wished to take advantage of this wonderful no-rent plan, he would have to be very quick. (“Act now or be locked out forever?”) As a matter of fact there was just a little uncertainty as to whether there was a single house left; for the agent had taken so many people to see them, (“We have other buyers”) and for all he knew the company might have parted with the last. Seeing Teta Elzbieta’s evident grief at this news, he added, after some hesitation, that if they really intended to make a purchase, he would send a telephone message at his own expense, and have one of the houses kept. So it had finally been arranged – and they were to go and make an inspection the following Sunday morning.

That was Thursday; and all the rest of the week the killing gang at Brown’s worked at full pressure, and Jurgis cleared a dollar seventy- five every day. That was at the rate of ten and one-half dollars a week, or forty-five a month… Marija and Jonas were each to pay sixteen dollars a month board, and the old man insisted that he could do the same as soon as he got a place – which might be any day now. That would make ninety-three dollars. Then Marija and Jonas were between them to take a third share in the house, which would leave only eight dollars a month for Jurgis to contribute to the payment. So they would have eighty-five dollars a month – or, supposing that Dede Antanas (“The old man”, whom nobody wanted to hire.) did not get work at once, seventy dollars a month – which ought surely to be sufficient for the support of a family of twelve. (At least they recognize they still need to eat.)

An hour before the time on Sunday morning the entire party set out… It proved to be a long mile and a half, but they walked it, and half an hour or so later the agent put in an appearance. He was a smooth and florid personage, elegantly dressed, and he spoke their language freely, which gave him a great advantage in dealing with them. (Specialized agents prey on people of their own ethnicity even today.) He escorted them to the house, which was one of a long row of the typical frame dwellings of the neighborhood, where architecture is a luxury that is dispensed with…

Still, it was freshly painted, and made a considerable show. (Buy, paint, flip –just like today.) It was all brand-new, so the agent told them, but he talked so incessantly that they were quite confused, and did not have time to ask many questions. There were all sorts of things they had made up their minds to inquire about, but when the time came, they either forgot them or lacked the courage. (Today we read, again and again, how buyer’s didn’t question their own agents.) The other houses in the row did not seem to be new, and few of them seemed to be occupied. When they ventured to hint at this, the agent’s reply was that the purchasers would be moving in shortly. (Vacancies are still a classic sign of speculators /flippers.) …

…The street in front of the house was unpaved and unlighted, and the view from it consisted of a few exactly similar houses, scattered here and there upon lots grown up with dingy brown weeds. (Brown yards are still a warning sign today.) The house inside contained four rooms, plastered white; the basement was but a frame, the walls being unplastered and the floor not laid. The agent explained that the houses were built that way, as the purchasers generally preferred to finish the basements to suit their own taste. (Same deal today, except you usually have to buy the finishing items from the builder.)…

There was no end to the advantages of the house, as he set them forth, and he was not silent for an instant; he showed them everything, down to the locks on the doors and the catches on the windows, and how to work them. He showed them the sink in the kitchen, with running water and a faucet, something which Teta Elzbieta had never in her wildest dreams hoped to possess. (OK, that’s a little humbling.) After a discovery such as that it would have seemed ungrateful to find any fault, and so they tried to shut their eyes to other defects. (Today, they call this an “as is” sale.)

Still, they were peasant people, and they hung on to their money by instinct; it was quite in vain that the agent hinted at promptness – they would see, they would see, they told him, they could not decide until they had had more time. And so they went home again, and all day and evening there was figuring and debating. It was an agony to them to have to make up their minds in a matter such as this. They never could agree all together…

Once, in the evening, when they were all in harmony, and the house was as good as bought, Szedvilas came in and upset them again… He told them cruel stories of people who had been done to death in this “buying a home” swindle. (Today, we call it working for the house.) They would be almost sure to get into a tight place and lose all their money; and there was no end of expense that one could never foresee; and the house might be good-for- nothing from top to bottom – how was a poor man to know? (Even today, professional home inspectors miss obvious flaws.)

Then, too, they would swindle you with the contract – and how was a poor man to understand anything about a contract? (Same excuse used today by bankrupt buyers.) It was all nothing but robbery, and there was no safety but in keeping out of it. And pay rent? asked Jurgis. Ah, yes, to be sure, the other answered, that too was robbery. It was all robbery, for a poor man….

The controlling factor was that they could not stay where they were – they had to go somewhere. (A self-imposed crisis we today after people decide they don’t want to pay rent.) And when they gave up the house plan and decided to rent, the prospect of paying out nine dollars a month forever they found just as hard to face. All day and all night for nearly a whole week they wrestled with the problem, and then in the end Jurgis took the responsibility. … So he told them, and so in the end the decision was made.

…And so they went and told the agent that they were ready to make the agreement. They knew, as an abstract proposition, that in matters of business all men are to be accounted liars; but they could not but have been influenced by all they had heard from the eloquent agent, and were quite persuaded that the house was something they had run a risk of losing by their delay. (Today, the agents tell you there are other bidders.) They drew a deep breath when he told them that they were still in time.

They were to come on the morrow, and he would have the papers all drawn up…

* * * * *

Conclusion: There’s nothing new under the sun.

If you enjoyed this, please let us know. We could publish the rest of this housing story.

“The Jungle,” is available online at http://sunsite.berkeley.edu/Literature/Sinclair/TheJungle/.

[bsrsharma]

Buying A House In 1906

(c) copyright View from Silicon Valley, 2007. All rights reserved.

Killing time on vacation last week, the local book store’s “classics” section beckoned. After considering “Moby Dick” and a couple others, Upton Sinclair’s “The Jungle” was the winner.

Sinclair describes life in the Chicago meat-packing district, originally built in 1864, by the Beef Trust (today’s Armour and Swift companies). Published in 1906 as a novel, “The Jungle” is widely viewed as the impetus behind President Teddy Roosevelt’s establishment of today’s Food and Drug Administration.

A story within the story describes the protagonist family’s purchase of a house. The parallels between 1906 and 2007 are startling!

As usual, comments and emphasis are added.

* * * * *

The Jungle, Chapter 4:

Their good luck, they felt, had given them the right to think about a home; and sitting out on the doorstep that summer evening, they held consultation about it, and Jurgis took occasion to broach a weighty subject…

…The center of the placard was occupied by a house, brilliantly painted, new, and dazzling. The roof of it was of a purple hue, and trimmed with gold; the house itself was silvery, and the doors and windows red. It was a two-story building, with a porch in front, and a very fancy scrollwork around the edges; it was complete in every tiniest detail, even the doorknob, and there was a hammock on the porch and white lace curtains in the windows. (The ads always looks “charming” or “cozy”) Underneath this, in one corner, was a picture of a husband and wife in loving embrace; in the opposite corner was a cradle, with fluffy curtains drawn over it, and a smiling cherub hovering upon silver-colored wings. (Attempting to induce nesting emotions for buyers into what is only a business transaction for sellers.)

For fear that the significance of all this should be lost, there was a label, in Polish, Lithuanian, and German – “Dom. Namai. Heim.” “Why pay rent?” (sound familiar?!?) the linguistic circular went on to demand. “Why not own your own home? Do you know that you can buy one for less than your rent? We have built thousands of homes which are now occupied by happy families.” (familiar again?) – So it became eloquent, picturing the blissfulness of married life in a house with nothing to pay. It even quoted “Home, Sweet Home,”…

…It appeared that this house contained four rooms, besides a basement, and that it might be bought for fifteen hundred dollars, the lot and all. Of this, only three hundred dollars had to be paid down, the balance being paid at the rate of twelve dollars a month. (They’re actually putting 20% down? What suckers! After that, it’s, 100 months, or eight years and four months, at $12 /month.) These were frightful sums, but then they were in America, where people talked about such without fear. They had learned that they would have to pay a rent of nine dollars a month for a flat, and there was no way of doing better, unless the family of twelve was to exist in one or two rooms, as at present. If they paid rent, of course, they might pay forever, (Conveniently overlooking the fact their $9 rent is less than a $12 house payment.) and be no better off; whereas, if they could only meet the extra expense in the beginning, there would at last come a time when they would not have any rent to pay for the rest of their lives.

…If they all combined, they would have enough to make the first ($300 down) payment; and if they had employment, (sound familiar?) so that they could be sure of the future, it might really prove the best plan. It was, of course, not a thing even to be talked of lightly; it was a thing they would have to sift to the bottom. And yet, on the other hand, if they were going to make the venture, the sooner they did it the better, for were they not paying rent all the time, and living in a most horrible way besides? Jurgis was used to dirt – there was nothing could scare a man who had been with a railroad gang, where one could gather up the fleas off the floor of the sleeping room by the handful. But that sort of thing would not do for Ona (his wife). They must have a better place of some sort soon – Jurgis said it with all the assurance of a man who had just made a dollar and fifty-seven cents in a single day. Jurgis was at a loss to understand why, with wages as they were, so many of the people of this district should live the way they did.

…The houses lay to the south, about a mile and a half from the yards; (a fairly remote suburb when you have to walk, in Chicago’s winters and summers, both ways, every day) they were wonderful bargains, the gentleman had assured them – personally, and for their own good. He could do this, so he explained to them, for the reason that he had himself no interest in their sale – he was merely the agent for a company that had built them. These were the last (“They’re not making any more land!”) and the company was going out of business, so if any one wished to take advantage of this wonderful no-rent plan, he would have to be very quick. (“Act now or be locked out forever?”) As a matter of fact there was just a little uncertainty as to whether there was a single house left; for the agent had taken so many people to see them, (“We have other buyers”) and for all he knew the company might have parted with the last. Seeing Teta Elzbieta’s evident grief at this news, he added, after some hesitation, that if they really intended to make a purchase, he would send a telephone message at his own expense, and have one of the houses kept. So it had finally been arranged – and they were to go and make an inspection the following Sunday morning.

That was Thursday; and all the rest of the week the killing gang at Brown’s worked at full pressure, and Jurgis cleared a dollar seventy- five every day. That was at the rate of ten and one-half dollars a week, or forty-five a month… Marija and Jonas were each to pay sixteen dollars a month board, and the old man insisted that he could do the same as soon as he got a place – which might be any day now. That would make ninety-three dollars. Then Marija and Jonas were between them to take a third share in the house, which would leave only eight dollars a month for Jurgis to contribute to the payment. So they would have eighty-five dollars a month – or, supposing that Dede Antanas (“The old man”, whom nobody wanted to hire.) did not get work at once, seventy dollars a month – which ought surely to be sufficient for the support of a family of twelve. (At least they recognize they still need to eat.)

An hour before the time on Sunday morning the entire party set out… It proved to be a long mile and a half, but they walked it, and half an hour or so later the agent put in an appearance. He was a smooth and florid personage, elegantly dressed, and he spoke their language freely, which gave him a great advantage in dealing with them. (Specialized agents prey on people of their own ethnicity even today.) He escorted them to the house, which was one of a long row of the typical frame dwellings of the neighborhood, where architecture is a luxury that is dispensed with…

Still, it was freshly painted, and made a considerable show. (Buy, paint, flip –just like today.) It was all brand-new, so the agent told them, but he talked so incessantly that they were quite confused, and did not have time to ask many questions. There were all sorts of things they had made up their minds to inquire about, but when the time came, they either forgot them or lacked the courage. (Today we read, again and again, how buyer’s didn’t question their own agents.) The other houses in the row did not seem to be new, and few of them seemed to be occupied. When they ventured to hint at this, the agent’s reply was that the purchasers would be moving in shortly. (Vacancies are still a classic sign of speculators /flippers.) …

…The street in front of the house was unpaved and unlighted, and the view from it consisted of a few exactly similar houses, scattered here and there upon lots grown up with dingy brown weeds. (Brown yards are still a warning sign today.) The house inside contained four rooms, plastered white; the basement was but a frame, the walls being unplastered and the floor not laid. The agent explained that the houses were built that way, as the purchasers generally preferred to finish the basements to suit their own taste. (Same deal today, except you usually have to buy the finishing items from the builder.)…

There was no end to the advantages of the house, as he set them forth, and he was not silent for an instant; he showed them everything, down to the locks on the doors and the catches on the windows, and how to work them. He showed them the sink in the kitchen, with running water and a faucet, something which Teta Elzbieta had never in her wildest dreams hoped to possess. (OK, that’s a little humbling.) After a discovery such as that it would have seemed ungrateful to find any fault, and so they tried to shut their eyes to other defects. (Today, they call this an “as is” sale.)

Still, they were peasant people, and they hung on to their money by instinct; it was quite in vain that the agent hinted at promptness – they would see, they would see, they told him, they could not decide until they had had more time. And so they went home again, and all day and evening there was figuring and debating. It was an agony to them to have to make up their minds in a matter such as this. They never could agree all together…

Once, in the evening, when they were all in harmony, and the house was as good as bought, Szedvilas came in and upset them again… He told them cruel stories of people who had been done to death in this “buying a home” swindle. (Today, we call it working for the house.) They would be almost sure to get into a tight place and lose all their money; and there was no end of expense that one could never foresee; and the house might be good-for- nothing from top to bottom – how was a poor man to know? (Even today, professional home inspectors miss obvious flaws.)

Then, too, they would swindle you with the contract – and how was a poor man to understand anything about a contract? (Same excuse used today by bankrupt buyers.) It was all nothing but robbery, and there was no safety but in keeping out of it. And pay rent? asked Jurgis. Ah, yes, to be sure, the other answered, that too was robbery. It was all robbery, for a poor man….

The controlling factor was that they could not stay where they were – they had to go somewhere. (A self-imposed crisis we today after people decide they don’t want to pay rent.) And when they gave up the house plan and decided to rent, the prospect of paying out nine dollars a month forever they found just as hard to face. All day and all night for nearly a whole week they wrestled with the problem, and then in the end Jurgis took the responsibility. … So he told them, and so in the end the decision was made.

…And so they went and told the agent that they were ready to make the agreement. They knew, as an abstract proposition, that in matters of business all men are to be accounted liars; but they could not but have been influenced by all they had heard from the eloquent agent, and were quite persuaded that the house was something they had run a risk of losing by their delay. (Today, the agents tell you there are other bidders.) They drew a deep breath when he told them that they were still in time.

They were to come on the morrow, and he would have the papers all drawn up…

* * * * *

Conclusion: There’s nothing new under the sun.

If you enjoyed this, please let us know. We could publish the rest of this housing story.

“The Jungle,” is available online at http://sunsite.berkeley.edu/Literature/Sinclair/TheJungle/.

[bsrsharma]

California's strict and bureaucratic land-use regulation has driven the price of developable land through the roof

Can regulations alone add a few hundred thousand to price of land? What about supply being smaller than demand? If Cal. regulations are so expensive, what is the price in the interiors of the state – El Centro, Needles, Bakersfield, Kettleman City, Fresno, Visalia etc., Do they all have $500K and up homes?

[bsrsharma]

California's strict and bureaucratic land-use regulation has driven the price of developable land through the roof

Can regulations alone add a few hundred thousand to price of land? What about supply being smaller than demand? If Cal. regulations are so expensive, what is the price in the interiors of the state – El Centro, Needles, Bakersfield, Kettleman City, Fresno, Visalia etc., Do they all have $500K and up homes?

[bsrsharma]

California's strict and bureaucratic land-use regulation has driven the price of developable land through the roof

Can regulations alone add a few hundred thousand to price of land? What about supply being smaller than demand? If Cal. regulations are so expensive, what is the price in the interiors of the state – El Centro, Needles, Bakersfield, Kettleman City, Fresno, Visalia etc., Do they all have $500K and up homes?

[bsrsharma]

they were in a home a little over 1,000 sq feet (with 2 small kids)

Ozzie – This is completely unrelated; is there a reason why they don't take that $400K and move to a place with a little more joy in life?

[bsrsharma]

they were in a home a little over 1,000 sq feet (with 2 small kids)

Ozzie – This is completely unrelated; is there a reason why they don't take that $400K and move to a place with a little more joy in life?

[bsrsharma]

they were in a home a little over 1,000 sq feet (with 2 small kids)

Ozzie – This is completely unrelated; is there a reason why they don't take that $400K and move to a place with a little more joy in life?

[bsrsharma]

I don't think the FED knows what it's even supposed to do anymore.

Actually, I think it is more complicated. FED is in a tricky position of having to solve a financial crisis but not appear to be doing so. If everyone understands FED is in crisis management mode, that worsens the crisis. e.g. Imagine what a run on major banks will do now. So, they have to resort to these underhanded black arts to pump money into the arteries. They seem to be whispering: show me a secret hole, (any hole as long as it is hidden from public view) where I can squeeze some funds in.

[bsrsharma]

I don't think the FED knows what it's even supposed to do anymore.

Actually, I think it is more complicated. FED is in a tricky position of having to solve a financial crisis but not appear to be doing so. If everyone understands FED is in crisis management mode, that worsens the crisis. e.g. Imagine what a run on major banks will do now. So, they have to resort to these underhanded black arts to pump money into the arteries. They seem to be whispering: show me a secret hole, (any hole as long as it is hidden from public view) where I can squeeze some funds in.

[bsrsharma]

I don't think the FED knows what it's even supposed to do anymore.

Actually, I think it is more complicated. FED is in a tricky position of having to solve a financial crisis but not appear to be doing so. If everyone understands FED is in crisis management mode, that worsens the crisis. e.g. Imagine what a run on major banks will do now. So, they have to resort to these underhanded black arts to pump money into the arteries. They seem to be whispering: show me a secret hole, (any hole as long as it is hidden from public view) where I can squeeze some funds in.

[bsrsharma]

100% financing will never disappear

There will always be Las Vegas!

[Author]

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