tag:blogger.com,1999:blog-5035949355013113578.post1366261498024208605..comments2023-10-17T22:56:42.784-04:00Comments on Only in The Republic of Amherst: Party House of the WeekendLarry Kelleyhttp://www.blogger.com/profile/02614645831526190536noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-5035949355013113578.post-16586306835277384502013-08-06T13:56:22.224-04:002013-08-06T13:56:22.224-04:00Yeah, like Detroit for instance.
Do not forget th...<i>Yeah, like Detroit for instance.</i><br /><br />Do not forget that John DeLorean published <a href="http://www.amazon.com/Clear-Day-You-General-Motors/product-reviews/0380517221" rel="nofollow"><i>On a clear day you can see General Motors</i></a> in 1979 -- some 34 years ago, when "The Big Three" were first starting to be decimated by the Japanese cars.<br /><br />Like Detroit, Amherst will continue to limp along for some time, but I'd get out of Amherst now while the going's good. <br /><br />UMass is in trouble the same way General Motors was in trouble -- and both are big enough to continue onward via inertia for some time -- Kodak and the Penn Central Railroad were the same way -- and Amherst inevitably will suffer the fate of other municipalities who depended on the largess of a dying behemoth.<br /><br />What I suspect happened in Detroit is what is happening in Amherst -- a shift from owner-occupied to rented houses. <br /><br />"Income properties" which have been speculated up in price over the past 30 years with the presumption that you can get a 5%/7% "return" on the "investment" now -- and be able to sell them for more later when you've retired and are in a lower income bracket.<br /><br />The problem is that the people doing this are highly leveraged -- a fancy way of saying "owe lots and lots of money." Richard Tisei is a good example of this -- during last fall's election it first was claimed he was a successful businessman with references to the value of the properties he "owned" -- and then it came out how much he had in outstanding debt on them, and how little equity he actually had.<br /><br />These slumlords may have a nice address in a Boston suburb, with shiny cars and the rest, but they owe an incredible amount of money on just that -- not to mention having borrowed more to purchase the Amherst rental(s).<br /><br />Hence they may need that $2000/month just to pay their bills -- just to service their debt -- and should (a) interest rates rise and (b) Amherst rents decrease -- they are going to simply "walk away" from these properties in large numbers. They'll either do that or go completely bankrupt -- either way, the banks will own them and you can imagine where that will go.<br /><br />And should a bank "dump" a lot of properties onto the market in Amherst -- which in some situations they'd have to, in other cases, it would be a lot of banks & mortgage companies each "dumping" a couple -- you could see the critical mass that would create...<br /><br />Unlike owner-occupied and struggling upside-down, a tenant is not going to pay a rent higher than a competitive market will demand -- and AntiTrust laws preclude any setting of minimum rents. So it will be a "chase to the bottom" price war in attempts to get *some* rental income, with people not willing to do this instead having properties vacant.<br /><br />Just like Detroit.<br /><br />And that's how you can have properties that are going unsold even at the asking price of $1. <br /><br />And I will laugh.Dr. Ednoreply@blogger.comtag:blogger.com,1999:blog-5035949355013113578.post-63770248029383068302013-08-05T20:02:27.896-04:002013-08-05T20:02:27.896-04:00"Not a city known for good schools, or anythi..."Not a city known for good schools, or anything else"<br /><br /><br />Yeah, just like Ponziville. Whatever we want to hearnoreply@blogger.comtag:blogger.com,1999:blog-5035949355013113578.post-53290851701543050242013-08-05T12:49:45.312-04:002013-08-05T12:49:45.312-04:00Not a city known for good schools, or anything els...Not a city known for good schools, or anything else Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5035949355013113578.post-40501515981223852072013-08-05T11:31:46.981-04:002013-08-05T11:31:46.981-04:00Yeah, like Detroit for instance.Yeah, like Detroit for instance.Larry Kelleyhttps://www.blogger.com/profile/02614645831526190536noreply@blogger.comtag:blogger.com,1999:blog-5035949355013113578.post-10579712081776599912013-08-05T11:22:09.798-04:002013-08-05T11:22:09.798-04:00According to your logic housing prices should plun...According to your logic housing prices should plunge 40%. Not exactly good for the tax base.Anonymousnoreply@blogger.com