AFSCME 3357-HOF'S BLOG

NYT - Price of Homes Skyrocketing in some areas


I was stunned to read in today's New York Times (link below, free online registration required) that the median home price in Orange County California is now $572,000 and has risen 28% in the past year alone. The article attributes a large portion of the increase to more lenient lending criteria and greater availability of "no doc" and 100% financing loans. There's no way that the US can compete with China if we have to pay workers enough to afford a $572,000 house. The article rightly points out that these boom markets can easily go bust if interest rates rise. If the market will only support $572,000 now because of low interest rates, if rates go up, sales prices are likely to come down. This means many consumers will be "upside down" on the loans, and in an economic downterm the borrowers will file bankruptcy and walk away from the loans in droves When this happens, there will be pressure on our loan guarantee system. A string of foreclosures in a neighborhood will depress home prices further.

Not all areas are equally affected. Where I live in Indianapolis, the median home price is about 1/3 what it is in Orange County. The $572,000 figure would put you in the top 1-2 percentile. You can, quite literally, get a mansion for that price.


The New York Times > Business > The Ever More Graspable, and Risky, American Dream

Our Contract - My Opinion

Fellow 3357 Members, you should have received the packet for ratification of the contract. I'll give you my take on it - and I'm speaking for me and not the union. The contract has some good stuff in it: same sex domestic partner benefits, election day off and a raise. The raise varies depending upon your seniority level and the year of the contract, but it looks to me that at about $1500 per year, or a little under 3%, it is close to what the UAW members got, and it's better than we got last time. No give backs on health benefits, and a few increases, especially to the dental, that's good. I'm a little concerned over lack of a COLA (cost of living adjustment) especially in light of potential inflation (see note above regarding home prices). I don't think we have a history of receiving COLAs, so I can understand why the bargaining team didn't dwell on the subject.

Overall, I think it is a good contract, and I voted for it. I want to thank the entire bargaining team, and those who helped out on a supporting basis (including covering for the bargaining members while they were away). I (we) appreciate your efforts.