Friday, April 25, 2008
It was just a couple years ago that newspapers all across the land were full of stories about how wealthy we had all become, largely due to rising home prices. Nobel prize winning economists were even justifying the zero percent savings rate by marveling at how much higher asset prices had moved.
Now that home prices are in a virtual free fall, the nation's newspapers are filled with stories of lament, anger, and disillusionment and you don't hear too much about the typical homeowner's balance sheet anymore.
Well, at least not about their balance sheets improving.
A story in today's USA Today noted the soaring number of unpaid utility bills and, here in the Sierra foothills in California, yesterday's local paper had a one-two punch on the front page - soaring food and energy prices along with steps the local utility company is taking to deal with the current wave of foreclosures.
It's too bad that the blog name Boom2Bust is already taken - that would have been a good successor to the name at the top of the page you are now reading (no, a name change is not being contemplated in the near-term, but someday the name will probably change).
From The Union Democrat - the "Leading Newspaper of the Motherlode since 1854" - comes a report of sticker shock at the local grocery store and problems at the food bank:
Food prices surging with gasAnd, as if to reinforce how things are rapidly changing for the worse, this story was also on yesterday's front page:
Published: April 24, 2008
By JAMES DAMSCHRODER
Surging gas prices are depleting wallets not only at the pump, but also at the grocery store checkout counter.
The cost of food is climbing faster than it has in 17 years and the No. 1 culprit is the surge in fuel prices, especially record high diesel prices, according to the U.S. Department of Agriculture.
Amador-Tuolumne Community Action Agency food bank director Lee Kimball said that, over the last five years, the food bank has suffered on multiple fronts: a rise in food costs, a decrease in government and corporate donations and an increase of those needing assistance.
The same amount of money will purchase 41 percent less food today than it would have five years ago, Kimball said.
Over the last five years, there's been a 41 percent decrease in government food donations and a 36 percent decrease in corporate food donations at the ATCAA food bank.
This is compounded by an 88 percent increase in households that are reliant on ATCAA food bank services over the last five years.
"People from the middle class, for the first time, are having to ask for help," Kimball said. "Two people recently were in here crying from embarrassment because they've never had to ask for help in their lives."
CCWD ponders foreclosure aid for customersWe weren't here at the height of the boom in 2005 - maybe it's worth looking up some past issues to see what the front page looked like back then.
Published: April 24, 2008
By HOYT ELKINS
Calaveras County Water District directors Wednesday tried to decide if it is in the best interest of the district and its ratepayers to offer fee waivers or other forms of relief to customers facing foreclosure on their homes.
Weighing in on the issue were the district's finance director, its customer service supervisor and its general counsel, all of whom agreed a carefully worded resolution would be needed to enact relief, and a carefully crafted form would be required to apply for it.
At issue is whether current district policy makes homeowners in the foreclosure process eligible for suspension or abatement of water service, or if the district could provide assistance in the form of waiver of fees or penalties.
Customer Service Supervisor Douglas Wilson told the board that 159 homes served by the district have gone to foreclosure between January 2007 and the middle of this month. He identified three types of foreclosure customers: those trying to save their homes; those who live in their homes, don't pay the mortgage and eventually abandon their homes, and, finally, those who have left their homes and are not paying the mortgage.
Among the first two types, Wilson said, a high percentage continue to pay for water service even though they are not paying the mortgage. For those not paying their water and wastewater bills, fees and penalties continue to accrue until they eventually go to collection. Wilson said only about half of the money owed is recovered by the district, and also noted that liens against the property can take years to collect.