It sickened me to see cash-strapped families pushed out to the far-flung fringes of Phoenix during the mania - places like Verrado and Maricopa, which were a good 25 miles outside of downtown. Why they thought they had to 'buy' instead of renting a place closer in is beyond me, but alas, that's what they did.
So these communities will now become foreclosure ghost towns. The 'buyers' there were failed flippers as well as the last suckers in, using toxic loans, barely able to afford the minimum payment, let alone a 50% spike in gas prices to get to work. A lot of them were illegal immigrants, who put no money down and now get to just walk away. While Bear Stearns fails.
Prices in places like these are already down 50% from their peak. Is 80% off feasible?
And for the rest of America, besides the crash in exurb home prices, get ready for a firesale on big pickup trucks, Hummers, Navigators and all the gas-guzzlers. There's going to be a swift downsizing in lifestyles, led by the size of cars and homes.
$5 gas changes everything.
"I've heard people say that Maricopa is going to be a ghost town because people are trying to get out," says Margie O'Campo de Castillo of Arizona Dream Realty.
"They can't afford the drive any longer. The time and the cost of driving back and forth is just not sustainable."