Monday, July 30, 2007

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Jewish Real Estate Crunch in the US?

by Akiva at Mystical Paths

On my block, there are 5 homes for sale. 60 for sale in our community. This is about double the average over the past 5 years...

We were speaking to a friend in Monsey. They bought their sizable kosher-oriented home about 15 years ago. It was fairly expensive at the time, around $450,000 (B"H, all yidden should be able to afford such). They put their home on the market for $1,000,000 just recently. When asking why, they said as about 2/3 of their children have married, they no longer need a home of that size. And, as they've remortgated it to help pay for each wedding and life-set-up expenses for each couple, the mortgage on the home is $850,000, and with interest rates having gone up, they can't afford to continue making payments.

"If it doesn't sell quick, I guess we'll just let it be foreclosed." (May they be successful in selling it soon!)

The situation of being impacted by increasing mortgage rates and living expenses is not in any way unique to the Jewish community. Nor, I think, is having made some home purchases that previously would have been beyond means, by taking special low payment adjustable loans. Nor, for those who have had value in their property, is taking loans using that value. What may be unique is the need to essentially sell of their home value for yeshiva tuition, weddings, and paying for Torah learning for newly married couples (rather than for the latest big screen TV or newest SUV).

My evidence of a time of trouble is anecdotal, though US economic reports keep, very very gradually, showing the same.

So I ask you, and please comment, do you see these factors in your (US) Jewish communities?

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