Tuesday, July 7, 2009

A funny thing happened on the way to the recession

We live in an unusual county. Prior to the financial meltdown/debacle, many locals prided themselves on being the only Florida county to go McGovern. More recently, when the national home foreclosure rate was closing in on 1 in 450, here it was more like 1 in 827. Keeping in mind that Florida actually has a foreclosure rate above the national average, I got curious what make us so special? I have decided it is a few things, including luck, coincidence & maybe, just maybe brains.

First, because there is a large, large university within our shores a lot of money earned in other parts of the state gets spent here. I do not mean tuition, exactly (tuition in Florida is well below the actual cost of running the classes); I mean student money. They pay rent, they buy groceries, they spend a lot of their parent's cash around the area. So do football fans; football fans in particular pay lots of speeding fines, which is a lively source of income in these parts (well, it is).

Second, the main industries (many associated with the uni & others not, but probably would not be here but for the uni) are often the last you would cut from your personal budget. Education, yes but mostly I am thinking health care. I do not even know how many hospitals there are in the county seat alone, I can name four off the top of my head. There are not 1/4 million people in the entire county; that is a lot of health care. There are also almost twice as many people under the age of 18 than there are over the age of 65. Trust me when I say this is not the norm for Florida. This does not obviously tie in to industry, but it kinda-sorta does. Especially when your industry is health care.

Third, really smart people do not make as much money as you would think. We did the math once & figured out that hour-for-hour, a motivated cleaning woman with or without a high school diploma, employed by a professional cleaning company makes as much if not a bit more than A, a PhD physicist with a current & competitive research resume. No really. He has not logged less than 68 hours a week since August last year & often works more than that. He does not teach during the summer (& therefore does not get paid to teach during the summer), but he will work roughly the same hours. This being the case (& the local norm), McMansions are not a common housing unit here. & uni-money often being 'soft' money (renewed or not on an annual or semi-annual basis), even someone employed for years cannot get a loan without a sizable down payment. I never said the advantage of brains was in applying them, I just said more brains was maybe a factor.

More recently the housing market here in Florida is bouncing back. Guess where it is not bouncing: right here. In part because things did not lose nearly so much 'value'. & in part because a shocking number of the homes that DID tumble in value were rentals. Student rentals. & no one in their right mind will pay anything like $. 75 on the $1.00 for a house that has been inhabited by college students & their off-the-record sub-lets for any amount of time. The auction house I wrote about before did not sell. I heard from my neighbor who talked to the house's neighbor that at the appointed hour, not a single bidder had showed. If they are really expecting what they are asking for it that house will be empty a long-long time.

On the up side, the student neighborhoods have gotten much nicer. A friend of mine has lived in her own little house walking distance from campus for decades. There has always been an ebb & flow around her but about seven years ago it got much more virulent. The house next door was purchased by a family with at least two sons. Both of whom went, at different times, to uni here. So while not technically a rental property (& therefore not subject to any of those rules) it was effectively a rental property. Many more than the usual number of people lived there, parking on the lawn, parking on her lawn, collecting garbage around the house, not painting or repairing or mowing. The last straw was the half-pipe with spotlights they erected in the back yard. I do not know about town, but out here any structure with a roof or within 100 feet of a structure on an adjacent lot requires a permit & neighbors approval. Guess what they did not have (did not even try to get).

The student houses around campus still exist, of course, people have to live somewhere. But they are looking much better cared for. It turns out the only thing worse than having to pay rent while your kid goes here for 5+ years is having to supervise tenants for the 5 more years it takes to sell. The fines for an illegal half-pipe are no fun either. & that home-made video of how they behaved when your faux-tenants were told they had to take it down (& the tossing of debris into other peoples yards) well, that was kind of expensive, too.

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