There is a long-standing attitude in many areas that renters bring a community down. This may have been true once upon a time, but consider the situation of the last few years, particularly in bubble areas like Phoenix, Vegas, San Diego, and so on:
- So-called "owners" were able to "buy" homes with bad credit, no money down, and no income verification.
- Renters, on the other hand, have always been required to pass a credit check and put up a security deposit.
In fact, I've read about several true stories of bad-credit deadbeats who "bought" homes on subprime liar's loans, simply because they couldn't pass credit on a rental house or apartment. In other words, we've gone from a situation where, in the old days, if you had bad credit, you were excluded from buying and were forced to live in an apartment. In modern-day Arizona, we have a very ironic situation where bad credit excluded people from renting but allowed them to "buy" on liar's loans.
This would certainly explain the extremely rapid decline in the Phoenix area's quality of living in the last 5 or so years, particularly in Scottsdale where this nonsense seemed to be concentrated.
I find it hilarious that arrogant Scottsdale a-holes walk around with noses up in the air and Tommy Bahama shirts on their backs bragging about their "ownership" when those same people would've been laughed out of the room had they tried to rent even a small apartment with no credit check and no income verification.
(Seriously, try it. Walk into any rental office and tell them you want to lease a place, but refuse to demonstrate any proof of income or submit to a credit check. Try it.)
In a lot of neighborhoods, very affluent people are renting, while the "owners" in the communities are the deadbeats with trash all over the yard and bill collectors banging on the door.
Thoughts on this? Who else has experienced this in their neighborhoods? I saw it going on constantly when I lived in north Scottsdale and this was even before the housing fraud bubble got into full swing!
You are totally correct. When I lived in Scottsdale they had to check 3 references, do a credit check, and verify that I could afford the monthly rent. The nice thing was their deposits weren't that bad. Something like $300.00 up front. I lived at the San Marin in Near/In Old Town Scottsdale.
Posted by: Dan Taylor | December 10, 2007 at 10:51 AM
A)Not in rest of country anymore. Just name & social. Rental office will tell you Y/N real quick based just on credit.
B)What do people in AZ actually DO to make $? Besides RE (Which will be down for the next 2-3 years according to a friend).
Is there ANYTHING else? Lawyering maybe? I could never figure it out.
Posted by: fastcart11 | December 10, 2007 at 04:41 PM
Here in California the landlords have gotten ultra-strict. Even minor issues on your credit like a few late credit card payments here and there is enough to get you shut out. They know the liar's loan foreclosure people are now trying to rent and they're protecting themselves.
"What do people in AZ actually DO to make $? Besides RE"
Real estate was it the last several years. About 40% of the metro Phoenix economy is tied directly to real estate. Living there it seemed like every single person you met worked in real estate.
That's the fundamental problem with the Phoenix real estate boom. The *ONLY* thing fueling the growth of the city was the RE industry. Phoenix has no other major industry. Before real estate took over, it was a call center and factory town, but those jobs have all moved offshore leaving Phoenix with nothing but golf and some tourism, enough to support maybe 100,000 people but not the 4 million it now has.
That's why the effects of this crash will be really stunning and devastating on Phoenix. Vegas has the casino industry to support it. San Diego has the military and tourism. Phoenix however has nothing to provide jobs for the 40% of people who will lose their real estate jobs.
Posted by: Frank Rumbauskas | December 10, 2007 at 04:52 PM
The mechanic who worked on my car out of a shop in Tempe, told me that this wife who did well as a mortgage broker/clerk the past two years or so, had to find other employment. She's now slicing the bologna, (thin please!), as a deli clerk at a Fry's supermarket. Fry's pays around $8.75 per hour...
Posted by: raven | December 10, 2007 at 08:24 PM
ROFL...I knew it...
Though: casinos, military, tourism? Those aren't really valued added industries either. RE is a more real business sector than those, even though it's kinda down right now...
We be in some big trouble as a country.
Posted by: fastcart11 | December 11, 2007 at 07:11 PM