No Recovery: Molalla is the GHOST TOWN OF THE FUTURE

SNAPSHOT: Smart Growth and Infrastructure:

“As we build homes, workplaces, and shops, we must find or build a network of infrastructure to serve them. In addition to the driveways and utility lines that are needed on each building site, there are a number of categories that are typically furnished by the community at large, frequently at public cost. These include neighborhood costs such as streets, water distribution lines, sewer collector lines, and recreational facilities; community costs such as roads, water and sewer trunk lines, electricity lines, telephone lines, schools, emergency services (police, fire, and rescue), libraries, and parks; and regional costs such as regional roads, central water and sewer treatment, solid waste disposal, and central electricity and telephone facilities. Sprawl development costs more across all categories because it requires more infrastructure and more travel for service per unit.

With more compact, planned growth, on the other hand, the need for new infrastructure and services can be reduced, because growth can be directed to areas with existing service capacity, such as schools with additional classroom space. Where new infrastructure must be built, smart growth requires less of it to serve the same number of new units and also enables economies of scale for some services such as water and wastewater treatment.”- -Natural Resources Defense Council

As the bad news continues to roll in about the economy and especially about the ongoing real estate crisis, the leaders of Molalla’s so-called “government” need to quickly embrace the above quote and reverse course on SPRAWL PLANNING, i.e. the totally idiotic urban reserve. The article posted below – “Home Prices Falling Fast, Eroding American Wealth and Threatening the Recovery” – outlines what why Molalla’s  dependence on houses as an economy was a false path  and why the future will be grimmer than grim for any “official” who fails to demand that planning for 50 years stops and planning for the reduced near future must begin. Get a grip, Molalla, because what is outlined below is happening here in spades. Real estate values are TANKING AND CONTINUING TO TANK!

Google “Oregon Real Estate Trends” and find the bad news that Oregon housing values are expected to decline another 10% or so in the next year! Cheap is as cheap does – and the no SDC policy of the past and present means Molalla has little hope in the future housing market.

So Molalla: Since you FAILED TO MAKE THE BUILDERS PAY TO ENOUGH (OR ANY) SDC FUNDS FOR QUALITY OF LIFE and you are now BROKE, who is going to pay for the 50 year plan? You can’t afford any new parks now, let alone any new infrastructure – who is going to pay for the crumbling infrastructure in the light of the crashing real estate values which will ultimately result in  serious REDUCED property tax revenue for the city?

How can you even pretend you could AFFORD to grow?

Soon the REAL CENSUS will tell the REAL STORY of shrinking Molalla. Here’s a preview about what the feds believe is Molalla’s population:

MOLALLA 2009
Population 7,590
Source: U.S. Census Bureau, 2009 Population Estimates

That’s 210 bodies short of what’s on the signs that say “Welcome to Molalla, pop. 7,800”. It must have just about killed plannin’ Potter to have to pretend this year that the population stayed the same after all those inflated work sheets he sent to PSU. My favorite was a couple of years ago when he claimed Molalla grew 5.8% in the middle of the crash – a year other local (and much better quality cities) reported no growth.

Hey, we all know that the fake plannin’ dude from Hell Potter has trouble telling the truth but it will be fun to see the FEDERAL FACTS bite him in the ass this spring. Clueless, shrinking bergs like Molalla should be circling the financial wagons. Molalla doesn’t have a “comp plan” – it has expensive garbage. And towns who fail to accept the sins of the past will be the first GHOST TOWNS OF THE FUTURE.

Here’s a fun picture and video – it is 17902 Hidden Lake Drive in Oregon City – another distressed mansion.  It is 8,315 sq feet of insane overbuilt crap  and it just sold for $630, 000 as a bank foreclosure. Kind of makes you wonder what YOUR property is worth, doesn’t it?

Here’s the video tour of the above vast wasteland that some fool now gets to heat with tons of fossil fuel – or maybe they are going to open a homeless shelter – there is a great room that could house several families! How about it, maybe a commune for foreclosed upon mansion owners, they could claim a few square feet each and pretend they were still “high enders”!

Now, read this and ask yourself how anyone RESPONSIBLE AND HONEST could be wasting a cent of taxpayer money claiming that SHRINKING MOLALLA NEEDS 2,400 ACRES OF NEW LAND:

Home Prices Falling Fast, Eroding American Wealth And Threatening Recovery

Shahien Nasiripour

shahien@huffingtonpost.com | HuffPost Reporting

First Posted: 12-10-10 12:05 PM   |   Updated: 12-10-10 12:27 PM

Plunging home prices hammered household finances in the third quarter, eroding homeowners’ wealth and making them more vulnerable to foreclosure. As prices are expected to continue falling, the economic recovery could face a major stall.

Millions of homeowners saw their most valuable asset decay between July and September, according to recently released data from the Federal Reserve, as they lost a portion of the stake they can claim in their homes. A series of new reports reflects home prices are continuing to decline, increasing the pressure on America’s tepid housing market. Until the market finds a bottom, the foreclosure epidemic will feed upon itself, analysts say, as foreclosed properties drive home values down. With the unemployment rate hovering near 10 percent, and with companies showing historic reluctance to hire, the housing drag poses a significant impediment to an economic recovery.

By the end of this year home prices will have dropped $1.7 trillion, or about 7 percent, according to Zillow.com, a real estate data provider. This decline has accelerated: Since August, home prices have fallen 7.9 percent, data from Clear Capital, a Truckee, Calif.-based real estate research firm, show. It is the steepest decline in home values since the height of the financial crisis in 2008, said Clear Capital senior statistician Alex Villacorta.

Worse, home prices are forecast to drop an additional 10 percent next year, according to a recent report from Fitch Ratings, a major credit ratings agency.

Americans’ grasp on their homes is weakening.

Homeowners’ equity, or the stake they can claim in their homes, dropped two percentage points to 38.8 percent in the third quarter, according to the new Fed data. The drop ended five quarters of steady growth since the figure hit its all-time low of 36.3 percent in the first quarter of 2009.

“There continues, of course, to be a backlog of foreclosed properties, or properties on their way to foreclosure,” said Dean Baker, co-director of the Center for Economic and Policy Research, a Washington research group. “We’re not about to see the end of foreclosures anytime soon.”

The major problem, at this point, is the glut (and future glut) of distressed houses that haven’t yet hit the market. When lenders repossess properties and put them up for sale, the influx of inventory on the market tends to drive prices down further, which in turn makes other properties more vulnerable to foreclosure. With repossessed or soon-to-be repossessed properties waiting in the wings, this “shadow inventory” will continue to depress the recovery, economists and housing experts say.

As home prices continue to fall, more homeowners will see the value of their home drop below the value of their mortgage, plunging them “underwater.”

Making matters worse, the Federal government’s response to this crisis is widely considered to be a failure. The Obama administration’s program, designed to help struggling homeowners, has, in some cases, done the exact opposite. After 1.5 million homeowners were invited to try the program last year, 40 percent were later kicked out. Complicated rules requiring a homeowner to be in default before getting a mortgage modification can actually cause a property to enter foreclosure.

“There’s just this dogmatic resistance to think seriously about it, on the part of the government,” Baker said of the foreclosure prevention program. “It’s crazy. Is the point to give money to banks, or are you trying to help homeowners?”

The pain isn’t spread evenly. Some areas of the nation, such as California and Florida, have been hit especially hard.

“Probably four or five states will account for more than half of the decline,” said Stuart Hoffman, chief economist at PNC Financial Services Group. “A lot of that pain or loss will be concentrated in the same states where we’ve seen the decline up till now.”

Leading economists, including former Federal Reserve Chairman Alan Greenspan, say a so-called “double-dip” recession — a situation in which the economy shrinks again before resuming growth — is possible if home prices significantly slide.

As the nation grapples with an unemployment rate of 9.8 percent, some homeowners simply don’t have the means to pay down their debt. Even among Americans with good credit scores going into the financial crisis, one in seven reported that they weren’t able to pay their bills, often because of a job loss.

“It takes two things to cause a foreclosure or a default,” said Celia Chen, an economist at Moody’s Analytics. “It’s both the loss of a job, or not enough income, and being underwater.”

The bleak jobs situation isn’t helped by cash-hoarding companies. The Federal Reserve reported that corporations increased their cash holdings 7.3 percent last quarter compared to the previous three-month period, setting a new record with $1.9 trillion in liquid assets. Their caution, experts say, is reflected in the lack of hiring: Businesses hired 50,000 workers last month, the slowest pace since June, according to Labor Department data.

“They realize things could go bad relatively quickly, so they feel they have to protect themselves,” said Gregory Daco, U.S. senior economist at IHS Global Insight, an economics forecasting firm. “That’s in pair with not hiring.”

Relative to their short-term liabilities, U.S. corporations haven’t been this flush since 1956. By that same measure, their balance sheets are twice as strong as they were just nine years ago.

While families struggle nationwide, corporations and large banks appear to be in full-fledged recovery. Last quarter, corporate profits reached an all-time high of $1.66 trillion on an annual basis, according to the Commerce Department.

Low bond yields, fat profits and flush corporate balance sheets have helped drive up the stock market, making household balance sheets appear to be on the mend.

Despite the tanking housing market, household net worth rose 2.2 percent last quarter thanks to the rising value of stock portfolios. The Dow Jones Industrial Average increased 9.3 percent during that time.

The Dow “is right around where it was just before the big crash in September of ’08,” said Edward Friedman, an economist at Moody’s Analytics. “Housing prices haven’t really done anything, and those are the two major contributors to household wealth.”

This improvement has made Daco, of IHS, optimistic about the state of the economy. Although he acknowledged that “the housing sector is still in a relatively dire situation,” he said “the stock market gains are reflecting a general improvement in the U.S. economy.”

Daco predicted a sustainable, but uneven, recovery. Corporations will likely continue to hoard cash and home prices will continue to slide, but not enough to induce another recession, he said.

“I don’t think we can talk of a major risk of back-to-back recessions,” he said. “I don’t see that coming any time soon, given the sort of momentum we’ve been building up.”

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