Looking back at the housing boom and bust
Steve Chiotakis: We’re gonna get a look at the revised gross domestic product a little later this morning. Earlier reports had the nation’s economy growing in the third quarter at 2.5 percent. But the economy continues to struggle in a lot of places — like in San Bernardino, Calif., where the housing market there has been in a tailspin. It’s cost thousands of construction jobs, and the jobless rate tops 17 percent.
Marketplace’s Mitchell Hartman reports on a trip that he through the Golden State’s Inland Empire.
Mitchell Hartman: I met retiree Mike Brophy at a vintage car rally in downtown San Bernardino. He gave me a ride from his car — a replica 1929 Mercedes Benz convertible — back to my car, a rented Kia. I was there to cover the housing boom and bust. And I soon realized that sitting in that bucket seat next to me was a guy who’d been there since the beginning.
Mike Brophy: I’ve been in real estate since ’67. And then I got into real estate appraising in ’74, because real estate sales, you go broke about every five years. Appraising was steady. So I got in, did that until ‘ 95, and then got appointed assistant assessor.
Hartman: For San Bernardino County?
Brophy: San Bernardino County, yes.
Hartman: You must have seen the beginning of the boom in the 2000s.
Brophy: I refinanced my house. I bought my house for $189,000 and then it went up to about $425,000. Now it’s back down to about what I paid for it. I’m guilty, I took some money out — and I don’t know what the hell I did with it, either. I’m just as guilty as the next capitalist. I love money.
Hartman: Did people see the crash coming?
Brophy: I don’t think so. Because I predicted it and people thought I was just being silly.
Hartman: They just figured the land’s here, the demand will always be here.
Brophy: They figured people will just keep coming. They had since the ’40s, before the ’40s. So no, we didn’t think it would ever end.
Hartman: Do you think it’ll come back again? You think it’s just another cycle?
Brophy: I don’t think it’ll come back like it was because I don’t think unemployment will get under 8 percent. We have a different dynamic in this country.
And here in the Inland Empire, there’s a long way to go. San Bernardino County has one of the highest foreclosure rates in the country. And experts don’t expect home building to rebound until at least 2018.
I’m Mitchell Hartman for Marketplace.
Steve Chiotakis: There are maps showing how cities and states around the U.S. compare on unemployment, as well as pictures from Mitchell’s reporting in the Inland Empire.
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