PBS Frontline: The Middle Class and the New American Economy

[Katsmeow]

There was also a live chat that the producers and Keith Stanley took part in:

Is There Hope for the Middle Class? ? Live Chat Transcript | Two American Families | FRONTLINE | PBS

A few interesting things:

The producers interviewed 80 families back when it started and chose these 2.

Keith Stanley says he is still paying off college debt. He says he still has small loans left.

He was asked why he went to Alabama State and said it was inexpensive compared to local schools, he could get in easier, and it had a great business program.

The oldest Stanley daughter has an associate's degree and is a paralegal.

Tony Neumann has part-time work now and doesn't have a full time job.

Someone named Steph asked why the families stayed in Milwaukee. Keith Stanley replied "Steph, great question." The producer brought up general comments about expense, risk, families.

Keith Stanley then added: "Steph for the Stanley's unlike the great black migration up north, the gold rush of the last century there was no place to point to that would increase your chances of success, arguably Atlanta for many African Americans, in my humble opinion but my parents could answer that question better."

 

[scrabbler1]

How do you think the mortgage companies made such a killing selling these horrible mortgages to people who just could not fully understand what they were getting into. In my family, I am the "Go To" person. Sometimes they don't go to me, but when I learn of a foolish mistake they are about to take, I inject myself, and have to enlighten them into what they are doing, and offer a better alternative. They have always listened, and thanked me in the end for helping them. I can't explain it, but many people just don't understand finance. I am surprised by the lack of knowledge they poses in the things that I have learned over the years.

Substitute "circle of friends" for "family" and that is much like me. I have been helping my best friend for the last 25 years handle a large inheritance after his remaining parent (mother) suddenly passed away last year. He is smart enough to understand the stuff I tell him, but he isn't *that* savvy financially. I did make sure, with the backing of some of you on this board, to get him to not invest his Roth IRA into some annuity he did not need. Without me, he might have been taken (or suckered) in to that ifnancial product. He is my age (50) and could ER at any time but he likes working.

With my ladyfriend of several years, she has unfortunately damaged herself financially with some bad decisions and some bad luck. I have helped her out and have been trying to minimize the damage (i.e. "stop digging the hole") and put her on the road to better financial health. She is not financially savvy but, compared to her coworkers, she is a financial genius. For example, when her small medical office got taken over by big hospital in 2011, she had to figure out what to do with the profit sharing amount in her retirement plan. With my help, she did a direct rollover into the hospital's 403b plan and into the best one of a bad set of mutual funds. This, of course, avoided any tax liability. But many of her coworkers had no clue as to what to do, and the default option was to take a lump-sum cash payout subject to all kinds of taxes and penalties. When some of them learned what she did, they thought she was a genius.

 

[Letj]

I hesitate to even comment on this. I watched the show last night and it only cemented my feelings about all the families out there that can not make a living today without a college degree. This was not always the case. It is now. These people have been caught in the middle, and not for lack of trying.

Getting pregnant at a young age is the downfall of many a family, when they do not possess either a college degree or the intellect to start a business and make a success of it. Truth is, our society is comprised of all types of people with varying degrees of mental capacity. I don't know about you people, but when I look around (even in my own family circle) I see a wide variance on sheer ability and common sense. My aunt has six children. Three of them are fortunate and are rational competent people. The other three are complete ditzes. Couldn't find their way out of a paper bag. Do I think they could be any different? No, I don't. They were born with these limitations and are doomed to struggling and a life of hardship.

The one mother in the film did all she could conceivably do to send her one son to college and keep him there. It was impossible for her to do the same for the rest of the children.

As further shown in the film, at least two of her children were more intelligent and had more sense than the others. This is the way it is in real life. No matter how good a parent may be. Some offspring will be more adapt, more logical and responsible, while the others will not be quite so fortunate.

So, when I hear that talk from some members about not wanting to pay for the "slackers", I shake my head. When young families start off on the wrong foot when they are young, by getting pregnant, and they don't have the money to even pay the bills, how are they then going to "prepare for retirement". They are trying to prepare to keep a roof over their head and feed their family. There is no discretionary income in these families. No 401K's or Roths. No health insurance. They are not lazy slackers. They were kids who were young and foolish, and by the time they learned the mistakes they made, it was too late for them.

+1 - Very insightful and so true about life. It's easy to judge and assume that if we are successful by doing all the right things, others should be as well.

 

[MBAustin]

Thanks to omni and katsmeow for posting the additional links. And thanks to everyone for this very wide-ranging and thoughtful discussion, even though we don't agree on what it all means. It's a great example of the civil discourse that unfortunately seems to be so rare on the internet (not to mention TV and radio). We can all respect the different perspectives whether or not we agree, and we might even learn from one or two. Well done, everyone!

 

[Letj]

You obviously have not witnessed poverty in the third world like I have. I do mission work and been invited into the homes of the poorest of the poor in Central America and Asia. They live in cinder block, wood and metal roof shacks with no plumbing. They still cook with wood fired ovens and have an outhouse if lucky. Yet one thing is far more common than you realize. They have a power line feeding a single or two hanging light bulbs and a TV set, often a flat screen LCD. It's their window to the world and their only luxury.

They also often have 4-6 kids. Why. Because the man gets the woman of the house pregnant with 1 or more kids and when times get tough he leaves her. Another man comes to her "rescue" a few years later and the cycle repeats. Saying no is not often an option. That's how most of the non industrialized world operates.

Absolutely true of the vast majority of the world outside of Western Europe and America. The last paragraph also describes the underclass in America. It's a function of limited education, poverty and lack of opportunities which still characterizes most of the world.

 

[jollystomper]

Personally, I think journalism could do better. How about set the stage with some broader facts/figures, and then say 'This week, we will focus on two families that are still struggling, next week, we focus on two families who worked their way up'. It's just too cheap/easy to go one-sided, esp the side that will tug at the heart-strings. It is hard for me to respect that level of 'journalism'.

-ERD50

+1

As a contrast, I came across this story on fathers day... black family, in the south in the 60's, 7 kids... sounds like the recipe for poverty and struggle. But they seem to have done very well:

Grown children's success a blessing to Augusta father | The Augusta Chronicle

Doing a story on a couple of families like these as a contrast might provide more insight on thing to improve the odds.

 

[RAE]

I watched it and the message I got was that "good" jobs were the key to a sustaining middle class. I define a "good" job as one that pays a living wage and has decent healthcare benefits.

The last 35 years have not been kind to most working Americans. I was able to ER simply because I won the lottery by having a "good" job with benefits, education was affordable, and worked in an era where employees were considered the companies most valuable resource.

+1 to both of your points.

And those "good jobs" you mention are becoming more and more scarce. I was just reading an article the other day about the explosion of temp. jobs in this country. Many employers find it easier to hire a temp. worker and pay no benefits, no sick/vacation pay, no 401(k), not worry about workmens comp, etc.......and then just let the employee go whenever things get slow (so there is zero job security). A "disposable" workforce, more or less. That is very different from the way things were during most of my working days. Had I faced that kind of employment landscape, it's very doubtful that I would have been able to retire at the age that I did.

Sure, it still helps to acquire skills and education that increase your value to employers, and the people in the show were not highly skilled, but even with those skills, landing a "good" job these days is certainly not assured.

We still have a huge problem in this country with not only massive numbers of unemployed people, but just as many underemployed people, who are barely scraping by and have no chance of saving any money to deal with the next emergency, much less saving for retirement. It is not a pretty picture.

 

[clifp]

Not being a big fan of Bill Moyers, I was pleasantly surprised by the show, definitely worth watching. The Stanley's were admirable family in almost all respects, especially Mr Stanley. For a family without a high school graduate to raise 5 children including Keith who not only graduated college but is well on his way to be pillar of his community, much like dad. The other kids are doing well, no drugs, no jail and the generation behind, the nephew is articulate and is learning good values.

Having your kids do better than yourself, how is this not the American Dream?

Despite my millions and life of leisure, if you asked me who is more successful Claude Stanley or myself? I'd say Claude in a heartbeat, money ain't everything. His family will still be making their communities a better place, thanks to his strong value long after I am forgotten.

 

[Arifriekinel]

I'd say Claude in a heartbeat, money ain't everything. His family will still be making their communities a better place, thanks to his strong value long after I am forgotten.

+1.

It was very sad to see his wife feeling like she had failed. When looking at the Stanley family at the end, I didn't see an ounce of failure. They are the kind of people anyone would know and love. When they pass, it's not their wallets the world's going to remember. It seems society has convinced people that some of the less important things in life are worth fretting over when you've got love, family, community, a charitable spirit, and a smile.

 

[clifp]

A friend of my and his wife collect Christmas ornaments. The name of the national organization for folks who share their hobby/obsession, they put up more than 10,000 a year, is the "Golden glow of Christmas past"

My biggest objections to this genre of documentary (and to his credit Moyer didn't present stats about CEO pay yada yada) is it seems to imagine a mythical period of American history when it wasn't a struggle for the average family to make ends meet. When a getting sick didn't mean either dying for lack of care, or being deeply in debt. Where worrying about making the mortgage payment or paying for college wasn't a concern for most parents. I am dying to know precisely when this period of time was.
This golden glow of America past only exists in documentary producer's, memories not in reality.

Now what has changed is for a small number of lucky Americans, is a high school drop out with no skills could find a job which enabled him to enjoy an upper middle class lifestyle, due to the rise of unions. This happened for a few decades from the 50s through the 80s. Let's be honest that didn't work out so well for heavily unionized companies. Those jobs really don't exist anymore, and to a large extent the environment the created the luxury of high pay for low skill workers was killing 50 million people and destroying the industrial capacity of our economic competitors. The manufacturing jobs that are returning aren't low skilled although they don't need a college education.

However, by any objective measure American material prosperity has been increasing fairly steadily prior to the great recession. More of us own houses and they are twice as big as the 1960s, big increase in per capita auto ownership, RVs, boats, vacation homes, overseas travel and even more leisure time thanks to household appliances. We spend more on services. Our kids get more college degrees. Of course the electronics and computer revolution has brought us countless benefits that have improved our lives, in ways that the miracles of sliced bread never did.

The biggest problem we have with food is obesity among the poor. At the end of the show, the chronically under and unemployed Mr. Neuman drops a couple pounds of groiund beef into a skillet. I was thinking do it occur to anybody on producing show, how many billions of people on earth would think of ground beef as an amazing luxury.

Now the great recession really changed a lot of this and for many American the last 5 years are a big step backward financially and materially. We really can't sugarcoat it.

Mrs Neumann lost her home, over the last 5 years more than 5 million people went through a similar trauma. This rate appears to be several times more than any other period I have been able to find. I couldn't find similar data for the Great Depression, but mortgages were much less common in the 1930s.

Still we have more than 130 million households units in the country and roughly 2/3 of American own their own house so it is also worth pointing out that more than 90% of American kept their homes during the worse crisis to hit home ownership ever.

 

[Al in Ohio]

More leisure time?


Not from any statistics I've read..... The more time savings inventions we obtain, the more ways 'the man" finds to take that time saved and add it to the workweek here in America for himself.

 

[kmt1972]

At a marco level, I think what is taking place is regression toward the mean. The American Dream was only achievable for the medium and somewhat below medium household during the 1950s and 1960s when the USA had such a large lead over the rest of the world. As time went on, other economies converged toward the USA technological frontier and this process is only accelerating with emerging economies. This shift in global economic balance of power which in reality is just regressing toward a world a couple of hundreds ago really means that the medium household can no longer achieve what is defined "good jobs" that can pay for a "good" home owner lifestyle. The fact it was possible back in the 1950s and 1960s, on temporary basis only, calibrated people into thinking that is still possible when in fact it could longer sustain this. The medium household managed to keep up this delusion only by spending beyond its means which led to significant debt. To me that is the true cause of the 2008 crisis. We are still digging our way out of it. And realizing that for the medium income household, this "American Dream" is really no longer financially viable would be necessary to prevent future debt bubbles.

 

[RAE]

Now the great recession really changed a lot of this and for many American the last 5 years are a big step backward financially and materially. We really can't sugarcoat it.

The last 5 years have definitely accelerated the trend, but wages for the average American worker have been basically stagnant (or even declining) since the late 60s.
You can easily find various charts that depict this. Here is one quote about this situation from an article I was just reading:

"When we consider all working-age men, including those who are not working, the real earnings of the median male have actually declined by 19 percent since 1970. This means that the median man in 2010 earned as much as the median man did in 1964 — nearly a half century ago. Men with less education face an even bleaker picture; earnings for the median man with a high school diploma and no further schooling fell by 41 percent from 1970 to 2010."

Sure, Americans own bigger homes than ever and maybe there are more kids getting college degrees, etc, but when you look at the debt load of the average middle-class American now versus 30 years ago, it's pretty clear that a lot of people have had to go pretty deeply into debt to be able to afford those things.

 

[Al in Ohio]

The last 5 years have definitely accelerated the trend, but wages for the average American worker have been basically stagnant (or even declining) since the late 60s.
You can easily find various charts that depict this. Here is one quote about this situation from an article I was just reading:

"When we consider all working-age men, including those who are not working, the real earnings of the median male have actually declined by 19 percent since 1970. This means that the median man in 2010 earned as much as the median man did in 1964 — nearly a half century ago. Men with less education face an even bleaker picture; earnings for the median man with a high school diploma and no further schooling fell by 41 percent from 1970 to 2010."

Sure, Americans own bigger homes than ever and maybe there are more kids getting college degrees, etc, but when you look at the debt load of the average middle-class American now versus 30 years ago, it's pretty clear that a lot of people have had to go pretty deeply into debt to be able to afford those things.

Bingo.

I hear a lot of my coworkers complaining about how college costs have skyrocketed. While its true they have risen faster than inflation, that's only half the picture. The other half is that the same wage increase trajectory experienced in the 50's - late 60's has gone flat as CEO compensation has almost gone vertical during that same time period. We simply don't get compensated as much as was predicted for the same type of work.

Hence the proliferation of dual income families now.

 

[meierlde]

But isn't homes being underwater in most parts of the country a fairly recent phenomenon (since the great recession)? IIRC prior to that homes in most parts of the country were above water.

To give another example during the crash of the late 1980s a lot of folks in Houston were underwater (if they bought late in the preceeding boom) As an example the assesed value of my house fell by 50% (but it had gone up that much since I bought it). At that point there were between 3 and 4 thousand foreclosures a month in Harris County (Houston's County). I recall a neighbor who just walked away from their house, and I think it happened a lot. Now at that time it was not in a number of regions but one. (Of course around 1980 it was the last one out of Detroit for Houston please turn out the lights, during the preceeding oil boom).

 

[BLS53]

I can see how that could form a downward spiral. But it still probably came about by bad choices. I didn't watch, so don't have all the details, but...

DW & I also bought a house in 1981 at a very high interest rate mortgage. But we put > 20% down, we both had good paying, stable jobs, and we saved aggressively to build up our emergency funds. We could have got by on just my job, would have struggled on just DW's. And we also did not have our first child for another 5 years, after our mortgage rate came way, way down (it was an ARM, taken out near the peak, so it fell and fell), several raises and promotions later, and we were much more established.

I also got the impression these people had jobs that were relatively high paying considering the skill level required? I was kinda at the opposite end, being at the early stages of my career, I had every likelihood to expect a rising income. These guys were probably at their peak. That should influence your decisions. Later on in my career, I realized I had mostly 'peaked', unless I was willing to make some big changes. I acted accordingly.

Interesting that some of this took place in Milwaukee. I have some extended family from there, I could provide a Moyer-like story of a few of those families who faced some strikingly similar situations. And I can go back 30 years - low-skill, low education, multiple children at a young age, High School/GED only, then divorce, kids getting in trouble, etc. But the outcome was different, they are all doing pretty OK, maybe not 'great' by some measures, but well established and stable and happy. Does that change anything? Not really, facts/stats would be nice, maybe with a story here and there to illustrate each of the various facts/stats.

-ERD50

I agree it was bad choices. Just that some posters seem to not understand the math on how they got underwater on the mortgage. Creditors pour on the fees when you stop paying on time. Credit cards are even worse. A 6 month default period, depending on the principle, can sometimes result in a doubling of the balance owed. Just as investing can be confusing to the lower class, the cost of defaulting on debt can be confusing to those who have never swam in those waters.

 

[BLS53]

After watching the Bill Moyer documentary, I found it useful to review the Ken Burns documentary "The Dust Bowl" which was aired on PBS.

Perhaps the Neumanns and the Stanleys need to sit down and watch Burns' documentary to see and understand what hard times are and how geographic and employment flexibility was necessary for people to survive.

I was particularly interested because my family was involved in Dust Bowl agriculture and migrated to Chicago to work in manufacturing to keep from starving. I've been watching manufacturing and good union jobs diminish in the Chicago area for some time and the extended family's efforts to stay gainfully employed. It even hit close to home. I RE'd (fortunately FIRE'd) because MegaCorp closed the manufacturing facility I was employed at.

It's tough stuff. But frankly, I view the Neumanns and the Stanleys as "soft" and that there is a lot of downside to their situation. They likely need a "significant emotional experience" to permanently change their outlook on geographic and employment flexibility. Being born in a area where, at the time, high paying manufacturing jobs are plentiful and expected doesn't guarantee membership in the middle class permanently. Things change. Economies morph. People must be flexible.

While the 1930's were undoubtedly a tougher time than today, it was also easier to get a fresh start in a new locale than it is today. Today, a person's life is accessible with a few keystrokes. A low educated deadbeat in Milwaukee, is going to be a low educated deadbeat in Phoenix.

It's interesting to read biographies of notable people who came of age in the first half of the 20th century, and how many BS'ed their way into occupational fields in which they had no qualifications. I can't see that happening today, when everyone's life is on a computer monitor.

 

[BLS53]

Their lack of education and sophistication would have limited their success regardless of geography. Remember that even when Milwaukee celebrated an economic recovery, they did not participate in it.

Having three and five kids sank these families. Both of these families were very involved with their church and religion. I've been around a lot of folks like this, and I suspect that if you asked them why they had so many kids, they would tell you it was "God's will". Yet what these folks really could have used was a little less faith and a little more common sense.

+1 Some try to limit the "too many kids'' problem to certain ethnic groups, but it's present across the entire swath of American society. It can affect the upper middle class as well. Most commonly when a single divorced dad, has to pay 40% of his take home pay for multiple children from one or more marriages. That can take a guy out of the upper middle class in a hurry.

 

[BLS53]

Of course there are differences. But the Burns documentary helped me put the Moyer documentary in perspective.

I don't deny that the Stanleys and Neumanns have shown some employment flexibility. But if their vision in life is reaching and maintaining middle class by holding unskilled or semi-skilled blue collar jobs, they are likely going to need to be open to a move. Geographic flexibility would hardly guarantee doing better, but I don't think it could hurt.

People of this ilk don't have the vision and world view that most of the members here do. These are individuals that have likely been conditioned that they are below average since grade school. Higher education is viewed as something for people that are "better" than them. This was most apparent with the Neumann husband. This guy equates work and income with the rudimentary operation of tools. If there's no jobs for him using tools, he just mopes on the couch at home. That's all he knows, and all that he will ever know.

 

[NW-Bound]

Still, the low pays that these hard-working people got in their town were appalling. I do not think people would work for that in the West, and there are few unions here. Is the cost of living that much lower there for the lower pays to make sense? I do not think so, although I have not lived there.

Now, they could be doing the same work in other states, and be making a more decent living. Again, not every worker in other places is a high-tech worker. There are still mechanics, machinists, truck drivers, and lower-skilled laborers of all kinds. People of all different trades are needed for society to function. How's an island chocked full of doctors and scientists supposed to work? They would all die of hunger, not knowing how to produce basic staples. They would beg a baker for a slice of bread!

I am not one who would call their employers "dishonest" for paying them so little. Businesses must not be profitable there at all. Why? I do not know, but if I were them, I would say screw it, and move to a place where they would pay me more for doing the same thing.

PS. See my earlier post here for what other places would pay them, vs. the minimum wage they got in their town. Instead of just a minimum wage, they would get double the pay, benefits, vacation, 401k, etc...

PPS. Raising the minimum wage is not the answer. Without understanding why the local businesses are so unprofitable relative to elsewhere, all it does is to shut down whatever jobs are left there. No business can work without a profit. Only a government can run a deficit, and then not forever.

 

[clifp]

The last 5 years have definitely accelerated the trend, but wages for the average American worker have been basically stagnant (or even declining) since the late 60s.
You can easily find various charts that depict this. Here is one quote about this situation from an article I was just reading:

"When we consider all working-age men, including those who are not working, the real earnings of the median male have actually declined by 19 percent since 1970. This means that the median man in 2010 earned as much as the median man did in 1964 — nearly a half century ago. Men with less education face an even bleaker picture; earnings for the median man with a high school diploma and no further schooling fell by 41 percent from 1970 to 2010."

Sure, Americans own bigger homes than ever and maybe there are more kids getting college degrees, etc, but when you look at the debt load of the average middle-class American now versus 30 years ago, it's pretty clear that a lot of people have had to go pretty deeply into debt to be able to afford those things.

We could debate median/average income increases tell the cows come home. I could literally write a novella length book on how silly it is that our government uses the same methodology to collect data on income that we relied on during the New Deal. Although census workers are now allowed to use that new fangled invention the telephone instead of in person interviews, although cellphone interviews aren't allowed. In short in world were every Walmart manager can tell your precisely how many green shirts were sold before St. Patty's day for the past decade it is crazy how crappy our economic data collection is. So when people quote stuff about income. I want to know how do you define it and how did you collect the data, cause after looking into the sausage factory. I don't really believe it.

But when people say the average family is worse off than they were in the 1970, because yes a male with a high school diploma wages have gone up minimally since 1970. We are ignoring a host of other factors, rising wages woman, rising wages for the twice as many folks with a college education. 30% increases in real household wages since 1970, smaller households meaning more spending per person.

To me if we want to measure prosperity we just you look around at what people do and own . It is far more important what that income can and does purchases so some examples. Car manufacturers know precisely how many cars are sold in the US invoices get written, commissions get paid.
Cars per capita
1930 .217
1970 .545
2007 .843
2008 .828
Wiki

Home ownership
1970 62.9%
2009 67.4%
peak 68.8% 2006
wiki/census

Average home size
1970 1400 sq feet
2009 2700 sq feet
Association of home builders

Airline passengers
1970 ~180 million
2011 731 million
FAA

25-29 year old who have obtained Bachelors or more
1970 ~15%
2012 30.4%

25-29 year old high school or more
1970 71%
2009 85%
Census

Life expectancy at birth
1970 70.8
2010 78.8

Percentage of disposable income spent on food
1970 15.3%
2004 10.8%
CDC

Of course I am ignoring the vast increases in legal consumption of digital content, movies, computer games, music, TV shows. Money spent on items that didn't exist 40 years cell phones, computers, DVD, or was really uncommon cable TV, microwave ovens. Nor the increase in quality of most everything we buy from more reliable cars to 50" TVs, and higher quality food.

I will agree that debt loads are higher and to the extent that American have purchased stuff on credit that does exaggerate our material prosperity.

Yes the Neumann and the Stanley had a tough 25 years, they started work at the beginning of an era, when the rest of the world started getting it act together economically, abandoning Communism, Socialism, and other impediments to prosperity. But as others have noted they didn't look like they lived in poverty by any standard other than American. But more importantly they aren't typical.

Finally, we shouldn't forget there were also winners in this sad tale. When I was visiting in China, I meet a peasant family. Now this was very much a staged affair. The dad was making money showing off how a Chinese farm worked to foreign tourist. The wife had taken a job in the factory, perhaps one of the ones the Milwaukee families lost. So fertilizing was being done by collecting all the families and animal crap in a chamber pot and spreading it out around. Several of my fellow tourist were impressed with the "greenness" But when I asked them what they were most looking forward to in their new home, the farmer said indoor plumbing with a thoroughly delighted look and the two kids were equally excited. At the end of the day, I have to ask myself is there anything the Stanley's didn't have that I'd be willing to deprive a Chinese family of indoor plumbing? I don't think so.

 

[ERD50]

We could debate median/average income increases tell the cows come home. I could literally write a novella length book on how silly it is that our government uses the same methodology to collect data on income that we relied on during the New Deal.

.... So when people quote stuff about income. I want to know how do you define it and how did you collect the data, cause after looking into the sausage factory. I don't really believe it.

...

To me if we want to measure prosperity we just you look around at what people do and own . [see quoted post for long list]

That's a very powerful post clifp. Well done, thanks for that viewpoint.


-ERD50

 

[Redbugdave]

Who was it that said, "a chicken in every pot, a car in every driveway, and a smart phone in every palm"...

 

[pb4uski]

To give another example during the crash of the late 1980s a lot of folks in Houston were underwater (if they bought late in the preceeding boom) As an example the assesed value of my house fell by 50% (but it had gone up that much since I bought it). At that point there were between 3 and 4 thousand foreclosures a month in Harris County (Houston's County). I recall a neighbor who just walked away from their house, and I think it happened a lot. Now at that time it was not in a number of regions but one. (Of course around 1980 it was the last one out of Detroit for Houston please turn out the lights, during the preceeding oil boom).

I remember that one since DS and BIL owned a property in Austin around that time that was underwater and they were considering walking away, but they held in there and it recovered a few years later. But that was a uniquely regional problem IIRC.

 

[scrabbler1]

I bought my co-op apartment back in 1989 and by the mid-1990s its value had dropped by nearly half. But I had no plans to sell it at any time (I still live here in it) even if it were underwater for a few years. After a refi in 1992 to drop the interest rate by nearly 5 points (and cut my monthly payment by $200), I was paying down the mortgage and would soon pay it off on 1998, even if it had not fully recovered its value (being debt-free was far more important toward reaching FI and eventual RE). It did get back to its original selling price some time in the very late 1990s or in the early 2000s and is now worth more than I paid for it (again, not that I plan to sell it at any time).