President Bush of the United States mentioned it in his State of the Union speech: the American economy is not doing well. There are fewer jobs, the prices of food and fuel are rising and the housing market is deteriorating. In Los Angeles, at the heart of the American dream, the economic malaise can be seen on the streets.
 Stagnating US economy forces many to sell their homes |
There are For sale signs in the gardens all over the place. And on many of them the word 'foreclosure' has been added - forced sale. This is the case with a third of all houses on the market. And this problem looks likely to increase in the years to come.
Forced sale was also hanging above the head of 60-year-old Nordik, originally from Armenia. (He does not want his surname published.)
"Yeah, Foreclosure. Real estate gave me no good mortgage, there was foreclosure, no good. 4000, just the interest. I lose a lot of money. Like I put the money out the window, that's it."
There was a threat he would face forced sale after his mortgage payments increased to 4000 dollars per month. Luckily he was able to change his mortgage and now he only pays half this. But he has lost 100,000 dollars in one go because of it.
Downward spiral
Rich Americans have also been hit by the downward spiral in the housing market. In Beverly Hills, the neighbourhood for the rich and famous, the number of mansions for sale is conspicuous. Even a design house built last year has a For sale sign in its drive. The owner Harash is having trouble finding a buyer. Even after drastically lowering the asking price:
"It was 2.4 I think, but it came down to 1.5. Well, for this property and the size and the way they built it, it's a great prize, but there are so many big houses. You know, Malibu, Beverly Hills, so people have a lot of options for the same price."
The house is almost a million dollars cheaper. A Beverly Hills bargain.
Second-hand
And talking about bargains: increasing living costs have meant all Americans have had to economise. And where better to find a bargain than in the Goodwill Store, a shop selling second-hand clothing, furniture and crockery.
 "Life has become expensive" in the US |
"I've been here over 40 years, but I am going to go home eventually. Go back to Ireland. I am not going to stay here anymore. Because it's safer. The economy in America is never stable. It's always going up and down. The dollar is going to collapse."
So it's back to Ireland, where you pay in euros instead of the dollar which keeps dropping in value.
Bear it
But not everyone can escape the malaise. Nordik, who saw 100.000 dollars go up in smoke, will just have to grin and bear it.
Pension? The sixty-year old can forget about that for the time being. He has to keep on working, every day. For him and many of his compatriots the American Dream has never been so out of reach.
*RNW translation (nc)
Tags: foreclosure, housing market, Los Angeles, US economy