Ryan Dezember

This book is important, but I'm not sure if it's more or less important in the wake of the huge increase in home prices during the pandemic. I laughed when the author quoted lots being outrageously priced at 5 figures. There are lots going near my house for 400,000+, and the reason they're not selling isn't price but shortage of supplies due to the never-ending clusterf*ck of Covid.

I never thought I'd be a homeowner. Lots of my slightly older friends (and my sister) bought houses that put them underwater. But after dealing with crappy landlords for 15 years, I had enough and bought my first home. It took forever to save for a down payment (and bad timing nearly wiped that out, as much of it was invested and the stock market is a volatile landslide these days), so I have a lot of sympathy for folks in similar positions to me who may have strong credit scores and good salaries but cannot afford a place of their own. I don't think opting out of homeownership is a good option for us -- we need something else. I'm not sure what that is, and the author, while exposing the greedy speculation that led to 2007's crash, doesn't really talk about what could be done to help regular Janes and Joes like me and him.

While I read this book, I couldn't help but think how much money the author would have made on his house if he could have held onto it until 2021, and I wondered how much his rent has increased in the past two years now that he's opted out of homeownership. I also wondered what effect the inability to evict folks during Covid has had on all the rental corporations. I know Zillow stopped buying homes several months ago, so clearly not everything is rosy in the corporate home-buying department.

Basically -- this book was published right before a big upheaval occurred in the housing industry. I feel like its poor timing leads to a bit of irrelevancy and many questions.… (meer)

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Underwater: How Our American Dream of Homeownership Became a Nightmare by Ryan Dezember is a non-fiction book that the author wrote after making it through the 2008 housing crisis. Mr. Dezember is a reporter for the Wall Street Journal.

Part memoir, part financial history Underwater: How Our American Dream of Homeownership Became a Nightmare by Ryan Dezember gives the author’s perspective on the housing crisis, and how Americans are still feeling the effects of it decades later.

Mr. Dezember, like many people, found himself with a home that he can’t sell due to its worth dropping tremendously. The author felt it was his duty to pay back the money he borrowed, come hell or high water.
Did he do the right thing?
And if it was the right thing, was it for his sake or the bank’s?
Why did he feel so compelled to live up to his bad financial transactions when every bank and business do not feel obliged to do so?

These are some of the questions the author tries to answer in this book. Along with the analysis of his own financials misfortunes, the book also takes a look at the 2008 economic downturn. He describes what it feels like to own on your house more than its worth (underwater), as well as describing the flipping of condos in Alabama, sold and re-sold several times before they were even built.

The book goes back and forth between the author’s personal account, a look at the jaw dropping corruption which happened on a local level, as well as national, and even worldwide, implications. The author does capture, on a personal level, what a terrible time it was for thousands upon thousands of people. To see your home, and probably your biggest investment, go down the drain is heartbreaking and certainly has lifelong affects.

Like many books about disasters, this is a slow rolling, but fascinating narrative which is difficult to comprehend, upsetting when understood, but impossible to look away. I must suppose that the author dumbed down a few things to make the book readable for those of us who are not financial professionals. I think this was the right choice, while the truth is always more complex, it’s impossible to keep it all in one’s head and telling small stores, whether personal or about the shenanigans on the Alabama coast, it more relatable and understandable.… (meer)

My brother tells the story of a friend and his wife who in the early 2000s built their dream house in an upscale part of Oakland County, Michigan. After a few years they decided to relocate. They owed more than the house's market value.

Is real estate still a good investment? Perhaps if you are in it for the long run.

My folks bought a modest house in 1972 for $33,900. Between 2004 to 2005 it's value shot up by 72%. By 2009 when I inherited the house it's value had plummeted by 50%.

We weren't selling. It was our retirement home. Today the value has risen again, neighboring houses selling in the range of their high back in 2005.

Perhaps the house's value will plummet again. Who knows what will happen in ten or twenty years? But if we had not inherited a home, we would be renting. That $1500 a month expense would have made us penny-pinchers in our golden years, just as we were when we were starting out. Living without mortgage or rent has made all the difference.

Ryan Dezember was a journalist covering real estate for an Alabama newspaper when he and his wife purchased a modest home in 2005. Within years the marriage was over, the house up for sale. The house would not sell for what he owed. The housing market had collapsed.

It took ten years before Dezember could unload the house. He figures it cost him $60,000. He understood the real estate business, the deals and flipping that made billionaires overnight--selling housing that didn't even exist yet. Still, he was a sucker for the American Dream of homeownership.

Underwater explains the whole messy, disgusting process that ruined the lives of so many. People like my brother's friends who ultimately told the bank, accept the buyer's offer or we are walking away and you'll get nothing. (The bank opted for nothing.)

After we inherited my folk's house, we spent our days off doing yard work and upgrading the electric and appliances. We walked the dog in our so-to-be-neighborhood, noting the foreclosure signs and sale signs. It was heartbreaking. These same houses are now so hot, realtors are clambering for houses to sell.

Dezember's book is full of real estate details of the transactions in the Alabama beach community he covered. It can be overwhelming! The book is humanized by his personal story. The environmental impact of building on the white sand shore of Alabama is distressing to read.

Dezember notes that 55% of owner-occupied home in the US are filled with people like me--seniors who will swamp the market in the 2030s as they downsize or die. That means our home will fetch far less than it does today.

Should we sell when the value is high and rent?

Since the stock market is also unreliable, selling and investing the money could also be risky.

Underwater explains the real estate game and how people like you and me find our investments gutted overnight. "Banks are amoral," Dezember reminds us. It's all about profit.

I was given a free ebook by the publisher through NetGalley. My review is fair and unbiased.… (meer)