Live from Austin!

Buying a house is a really good way to attract the attention of sleazy businesses. We’ve had about a dozen offers of mortgage protection insurance. It’s not the service which is sleazy, it’s the way they offer it:

• The envelope has a message saying something like “Urgent information about your mortgage”.
• The name of the company we arranged our mortgage through is displayed in bold on the envelope, and usually in large bold print on the letter inside, to make it look as if it’s from them.
• The name of the company actually offering the insurance is usually not mentioned anywhere, except as the first line of the address on the reply-paid envelope.
• The letter is often from Delaware or North Carolina, states infamous for their lax regulation of financial services.
• The letter inside orders me to fill it out, as if it’s something I have to do to keep the mortgage.

For example, this afternoon’s sleazebag letter starts out like this:

Attention: Important Notice

Complete and Return

RE: MORTGAGE TIME SENSITIVE

[Name of actual mortgage company]

It goes on to say that the offer “terminates in 13 months after the close of escrow”—with an asterisk leading to a footnote in 6 point type saying that in fact, the insurance “may be purchased by homeowner at a later date”, though they may require a medical.

This particular solicitation manages to avoid revealing who it’s from at all—the reply paid envelope lists the “Mortgage Protection Center” at an anonymous PO box, and the letter just says that the letter is from “independent life and disability agents representing multiple A and A+ carriers offering specialized mortgage protection products”.

I’m sure they get plenty of business this way, but it doesn’t exactly make me want to send them my Social Security Number…

Crystal posts a link to a Boston Globe story about property prices in Massachusetts.

Houses here cost so much because there are too few of them for all the people who have been drawn to Boston because it’s such a great place for great minds to do great things. But that reputation, which has kept Boston competitive all these years, is beginning to buckle under the weight of absurd home prices. Even in a recession, Boston’s world-renowned hospitals, higher-education institutions, and biotech firms admit they are seeing their job offers turned down like never before, largely because of housing costs.

[...]

The Census Bureau says Cambridge is the city with the highest percentage of $1-million- plus single-family homes in the country. But this is a surprisingly recent phenomenon. Beaty has to go back only as far as 1986 to find Cambridge’s first million-dollar sale.

It’s the beginning of the end for Davis Square. Diesel only just survived being priced out, and there now appear to be two swanky upscale cocktail bars opening at once, each complete with chic frosted glass windows and ultra-modern designer furniture.

Meanwhile in Harvard Square, it’s so bad that the clothing chain stores like Abercrombie and Fitch are being priced out and replaced by boutiques selling Swiss watches.

An insightful comment from Robert Blatman, an obstetrician quoted in the Globe article:

“The crazy thing is, if I can’t afford to live in these areas, what about the teachers and the firemen? It really worries me that, at some point, this has to erode the quality of life that made the real estate around here so desirable in the first place.”

And that’s the problem. It’s not sustainable. As people making normal wages leave the state (10,000 a year on average), their homes go to developers and owner-speculators, not to another normal family. Ordinary businesses can’t get staff, because the only people within an hour’s commute who can survive on normal wages are the few still living with their parents. Which, in turn, means that everything from groceries to medical bills to utility bills gets jacked up 40% or more to compensate for the increased overheads.

So sooner or later, people start to look at their crummy 2 bedroom rented apartment with the rattling windows and chronic dust bunny infestation, and look at their bills, and then look at other parts of the country…and that’s why we’re leaving. Even if we had a million bucks, we wouldn’t be spending it to get a 2 bedroom house here. Cambridge is nice, but it’s not that nice.

Furthermore, it’s plain that the local powers-that-be aren’t going to do anything about the problem. If they’re lucky, the Boston metro area will turn into another Manhattan. If they’re unlucky, there will be a big crash. I don’t want to be around for either of those scenarios.