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Saturday, March 10, 2012

Polar Opposites


Meet Willow Tufano.

See's 14 years old and is going to give us a glimpse of what has to be the polar opposite of Vancouver manic real estate bubble. Fittingly she lives in the other corner of the continent... Florida.

Believe it or not Willow, at the tender age of 14, just bought a house in the Sunshine State.  

You read that right... she just bought a house.

In 2005, when Willow was 7, the housing market was booming. Home prices in some Florida neighbourhoods nearly doubled from one month to the next. Her family moved into a big house; her mom became a real estate agent.

But as Willow moved from childhood to adolescence, the market turned, and the neighborhood emptied out. "Everyone is getting foreclosed on here," she says.

After the housing market in the US collapsed, Willow's mom (Shannon) started working with investors who wanted to bid on cheap, foreclosed homes.

Sometimes Willow tagged along.

Recently her mom saw a two-bedroom, concrete-block home on auction for $12,000 — down from $100,000 at the peak of the bubble. Shannon was telling her husband about the house, when Willow piped up.

"I was like, 'What if I bought a house? That would be crazy,' " Willow says.

Willow wound up splitting the house with her mom and plans to buy her mom out in the next few years, and put her name on the title when she turns 18.

The place was a mess when they bought it. They cleaned it up and rented it out to a young couple for $700 a month.

Think about that for a moment.

Houses are so cheap in some parts of the United States right now that a 14 year old can buy them.  And the monthly rent that the 14 year old is collecting would equal the cost of the house in less than two years.

Compare that to the west side of Vancouver.

Multi-million dollar homes here command about $3,000 per month in rent. It would take you between 55-80 years of monthly rent to collect the cost of these homes.

I imagine, dear reader, your jaw is hitting the floor regardless of whether you are reading this in Vancouver or in Florida. Yet each reader (be they in Vancouver or Florida) is muttering the exact same thing about the other city:
"That is just whacked!!"
Indeed it is.

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3 comments:

  1. Astounding, simply astounding!

    ReplyDelete
  2. http://www.youtube.com/watch?feature=player_embedded&v=f7iK4DHPr9E

    Couldnt find the Steve Keen video with full detail.... yet....but this is a good overview with Max Keiser

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  3. The concrete block is important to the story. If it were wood frame, because the AC hasn't been running, it would have to be gutted to the studs, remediated, and then re-drywalled before it would be habitable. Not to knock Willow, who clearly has it going on, this is partly a story about a lucky find in the listings. Most houses down there need at least 15k of work before they can be lived in.

    ReplyDelete