March 17, 2008

With oil soaring to over $110 a barrel, those Hummers and homes in far-flung suburbs just got even more worthless


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."

29 comments:

Anonymous said...

All right, Frank. Let's hear it.

eric in vegas said...

"All right, Frank. Let's hear it."

LOL!

I'm looking for a new car right now but I'm tempted to wait til' the end of year. I'm thinking people are going to be so desperate I'll be able to get a decent sedan for thousands less. Anyone?

Anonymous said...

They should have special used car lots just for ex-REALTOR cars

eric in vegas said...

"They should have special used car lots just for ex-REALTOR cars"

I can't imagine there being much of a market for gas guzzlers. It's been a while since I've seen temporary tags on a big SUV.

eric in vegas said...

It's never been a better time to buy the used Hummer or Range Rover of your dreams!

Anonymous said...

I would feel disgusted driving the same car used previously by a realtwhore. Touching the same steering wheel, same seats...Ewwwwww!

Anonymous said...

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
-------------------------
Well its about time! Especially the FU%KING big pickup trucks!!!!!!!!!!!!!And their penis-challenged drivers!!!!!!!

Anonymous said...

Even 80% off is to optimistic. These house will be abandoned, and then they'll get stripped down. Their true value is what the plumbing, wires, floors, countertops and so forth will sell for.

Anonymous said...

I was up in Northern Virginia/DC over the weekend and there is no loss of traffic there. Cars, truck and just a couple of jerks driving their hummers, but there has been no slowdown in the amount of cars on the road. How high does it have to go to make people change their driving?

Anonymous said...

First, been lurking here for a while. Will I ever give up my HUGE truck? NEVER! Its a safety thing, pure and simple, and I will pay for it. I dont care if you walk away from an accident. But I care if I do! Got a mortgage and family to pay for! LOL!

tater said...

I would feel disgusted driving the same car used previously by a realtwhore. Touching the same steering wheel, same seats...Ewwwwww!

Yeah, the steering wheel is plastered with everything from baby shit stains to cheap perfume. Remember that if you ever go to shake the hand of a "Realtor".

Anonymous said...

I ever give up my HUGE truck? NEVER! Its a safety thing, pure and simple, and I will pay for it
----------

Just get a penis implant. Your safety insecurities will go away in a nano second.

mairca izda debol said...


Well its about time! Especially the FU%KING big pickup trucks!!!!!!!!!!!!!And their penis-challenged drivers!!!!!!!


The Mexicans in my area all have those fake penises or scrotums hanging off the back of their bumper of their giant trucks. There's also been a huge increase in the number of DWI accidents lately. The police won't do anything about it because LULAC and La Raza raised a storm about racism last time the cops cracked down on DWIs

Casey said...

What is shocking is that one still sees Hummers and Suburbans with paper plates. And this morning, Lowes just announced it is building a new store in Silverdale, a suburb on the west side of Puget Sound west of Seattle. The economy is better here than elsewhere but not that good! There are already two Home Depots and another Lowes within 10 miles. Nothing is moving in real estate and the number of McMansions on the market is high. I wonder what these people are smoking. But then, Bush says that the economy is going well, as he pats the back of "Heckuva Job" Bernanke

Stuck in So Pa said...

eric in vegas said...
"All right, Frank. Let's hear it."

LOL!

I'm looking for a new car right now but I'm tempted to wait til' the end of year. I'm thinking people are going to be so desperate I'll be able to get a decent sedan for thousands less. Anyone?
==========================

Same here. The pickup is 10 years old and has a lot of miles racked up and I am in the market for a new one, but I can wait.

Now, it is a gas hog, 4WD , 3/4 ton, and a full 8 ft bed. But, it's big, safe, it sits in the driveway for 29 out of 30 days a month, and when I want a couple sheets of plywood and a few 2x4's for a home project, I DON'T have to tie them on top of my Toyota.

Since road maintenance is all but non-existent here in Taxsylvania, esp. in winter, there is no way I could ever imagine us without a big 4WD "something" with decent hauling capacity, gas mileage be damned, just never for a daily driver.

Anonymous said...

I live in Scottsdale.

I rent an apartment.

I walk to work (work full time).

I ride the bus to ASU (grad school).

I fill up my car's gas tank once every 2-3 weeks.

All that saved cash goes into savings.

I laugh when I think about all those suckers crawling up and down the 101 freeway everyday on their 80 mile commutes because they live out in Chandler and work in north Scottsdale.

And when gas prices go up 1 penny and the local NEWS station goes out to the streets and interviews all these worthless dirtbags who cry and whine about how expensive gas is and how it impacts their lifestyle of driving 80 miles every day.

Lemmings.

Anonymous said...

"A lot of them were illegal immigrants, who put no money down and now get to just walk away. While Bear Stearns fails."

The legal immigrants and US citizens get to just walk away as well. I'm not sure what the illegal immigrant comment was for.

Also, why are you weeping for Bear Stearns? They made decisions that put them in their current state. No one held a gun to their head.

jake said...

I still enjoy driving my big truck averaging 15MPG. I'm not hurting financially. I thought ahead and chose to live within 2.5 miles from work. 95% of the miles I drive in the truck are hauling the toys, what it was designed for.

Anonymous said...

I plan on keeping my car, SUV 02 Escalade, paid off in 03. I did price a newer car this month to get something more gas efficient but with what i would get for trade-in plus putting 8k down i'm sitll looking at car pmts. of $200 to $300 so I decided to just keep my car until the wheels fall off. I live about 5 miles from my work so i don't commute much. Live in a small city.

Anonymous said...

I'm familiar with Maricopa because you have to drive through the town to get to the Harrah's casino. All the retail stores are located off the one main drag in town which makes weekend traffic a nightmare. Oh, and don't forget when the wind is blowing right you can smell the manure from the surrounding farmland that hasn't been sold yet for development. Real quality of life there.

Anonymous said...

Thank You HP!! Months of reading this blog has finally gotten to me..

I just don't know how the McMansion, SUV, and Starbucks set is going to cope with the next few years....

I just changed my whole life, signed a lease on a great apartment for me and the family thats as big as my house was and $400 a month cheaper. My commute is now a 5 minute walk to the train station, a 15 minute train ride to the subway that takes me the last 10 minutes to my job in the city. I purchased an annual commuter pass to lock in the cost and got a 10% discount.

The center of town is an 8 minute walk from home.

My car gets 50MPG and I am actually looking to sell it. We could probably get rid of both cars but, I should probably hang on to one.

Oh, and the apartment... HEAT AND HOT WATER INCLUDED, and rent guaranteed for two years!

At least now the largest cost line items in my budget are fixed for the next year some of it for two.

Did I mention I got a new job making $15K more a year to boot.. :-P

Reading HP got me to see this coming, now I am ready.

Anonymous said...

We are undergoing a fundamental change in the American lifestyle. those that have lived lean will prosper, those that do not will suffer. I believe our lives for average Americans will somewhat mimic Europe. Cheap oil of the 90s will go down as a very bad thing for America.

Anonymous said...


"A lot of them were illegal immigrants, who put no money down and now get to just walk away. While Bear Stearns fails."

The legal immigrants and US citizens get to just walk away as well. I'm not sure what the illegal immigrant comment was for.


For U.S. citizens and legal immigrants, the lender can go after the borrower in court.
There is no legal recourse for lenders if the person defaulting is not a legal resident, something that they did not consider when they originated the clown loan.

boston bruin said...

//Reading HP got me to see this coming, now I am ready.//

Me too stay tuned cuz it's just getting started

HOUSE2008 said...

I drive 89 miles each way every day. It's hurts but not quite fatal yet. Cost $500-600 a month in gas at current prices. I bought a Toyota Seinna which gets pretty good gas milage but wish it could get more. Previously we were driving two cars around & THAT was killing us in gas costs. That's when gas was $2.60 a gallon! I laugh now, I wish it were that again....

Anonymous said...

Anyone can contract, illegal or legal.
Anyone can be judgment proof, illegal or legal. Anti-deficiency laws maybe in place or just be a matter of practice for the lender whether the borrower is illegal or legal.

John S said...

Don't knock the Hummer. It's big. You could live in one...

Anonymous said...

The legal immigrants and US citizens get to just walk away as well. I'm not sure what the illegal immigrant comment was for.


Because the illegal immigrant won't have to pay one peny in taxpayer bailout dumbass!!!!

the other trader said...

speaking of gas prices, anyone see this?

http://tinyurl.com/3yv5mh


got gas?