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PREVIEW: Lot 354

A reduced price sign sits in front of a house.

TEXT OF STORY

STEVE CHIOTAKIS: The number of homes seized by banks topped 1 million last year, according to real estate data firm RealtyTrac. More foreclosures means less stability in the housing market.

Marketplace worked with Los Angeles public TV station KCET and its show, SoCal Connected, to tell the story of a single home. And that home's place in the American economy.

Marketplace Host Kai Ryssdal gives us a sneak peek inside "Lot 354."


KAI RYSSDAL: If you've been listening to this program over the past couple of years, you're familiar with our coverage of the housing market. The extreme highs, and the lows. Terms that've probably become part of your regular vocabulary like subprime loans, adjustable rate mortgages, short sales, loan modifications. But now I want you to forget all that and remember what used to drive residential real estate in this country.

A house. A tangible bit of real property that's yours.

Eric and Alison Feinberg moved in just before Thanksgiving last year. It is their first home.

RYSSDAL: So when you first came in here it didn't look like this. Describe it for me.

ALICE FEINBERG: No, the was all bricks.

RYSSDAL: The fireplace.

ALICE: Yes, it wasn't very pretty and --

ERIC: There was a big hulking mass of bricks there.

RYSSDAL: Literally when you walk through the door.

ERIC: Yeah, so one guy had a suggestion. Maybe we just mortar it over and it'll kind of mute itself into the wall.

It's a 1927 Spanish bungalow, about 1,800 square feet, three bedrooms, three baths.

Eric and Alison saved their money biding their time until four years after they got married they found this house. It's tract number 7603 in the county map books: Lot 354 -- on Point View Street in Los Angeles.

The Feinbergs are the third couple to own Lot 354 in the past eight years. They're the last link in a chain of transactions that help tell the story of the rise and fall of the American housing market. There were the former owners -- the ones with perfect timing, wWho saw the house triple in value during the four years they owned it.

SHAWNA PHELAN: It was, it's probably ridiculous at the price that we did sell it for in hindsight. But, at the time, you know, it was like, hey we did all this work, and you know we loved the house. I mean, we weren't, you know doing the work, to flip it at the time we did it.

There were the real-estate agents who were swamped with eager buyers. Buyers who knew they could get an easy loan with almost no proof of income

EITAN: You just put a number on the application. It could be your brother or your mother and they call and say hey do you work there? And that was that.

And there were the banks, swimming with money, pushing loans out to get more people into more houses.


CHIOTAKIS: To hear the full story of "Lot 354," check out Marketplace later today.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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Congratulations. You're over three years late but you finally got it right. Houses were being sold on the basis of the monthly payment, something that kicked in after the Bush administration started dropping interest rates. People were telling me to buy, buy, buy, and I kept saying no, no, no, that I don't care what the payments are, I would never be able to pay off the half million dollar loan it would take to get me into a house in this town. Other friends said they were staying put and waiting for the bubble to burst, then they'd move their investments from those benefiting from the bubble to those that would do well when it burst. And when a caller on your show told you he was doing this, you sounded surprised. So shame on you for being as easily mislead as the other losers in this scam, and for the part you played in this mess. Now I suppose I have to wait another three years for you to explain how people at the top managed 50% increases in income while everyone else was getting laid off or pay cut. In the mean time, maybe you can look into why banks are really not foreclosing on houses that are in default will end up profiting, at the investors expense.

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