This Times story is interesting because it actually shows how in the world the "Aos, with $50,000 in income, owe a total of $607,000 on mortgages for two houses they bought since they moved to the Phoenix area about two years ago." The emphasis is mine. They also have a $14,000 in credit card balances. Assuming that's their total current debt, they owe nearly twelve-and-a-half times their annual income. Clearly the rational step would be to declare bankruptcy, but that's become conveniently . . . difficult. Curiously, new restrictions on personal bankruptcies were passed at exactly the teetering crest of the housing-market wave-break. I'm sure that was just a coincidence, though.
For some additional Schadenfreude:
And while the region counts the aerospace company Honeywell International and computer chipmaker Intel among its largest employers, housing is the biggest component of the local economy, with construction accounting for nearly one in 10 jobs, or about 50 percent more than the national average.A classic pyramid scheme is "the biggest component of the local economy." Well, there's always Amway.
"Our economy out here is based on residential growth. That's our engine," said William A. Gosnell, a principal in Lee & Associates, one of Phoenix's largest commercial real estate firms. But with housing inventories and foreclosures up and prices down, residential construction slowed to a crawl, crippling the overall economy in the process.