Postcards From the Zombie Apocalypse

33 thoughts on “Postcards From the Zombie Apocalypse”

  1. “Would it have been better to buy property in the desert in 1970 and take advantage of a wave of growth for a few decades, or buy now at the top of that cycle and slide down from here on out?”

    Johnny, would you mind elaborating on this a little?

    I thought I was “Find[ing] a place you love that also happens to be cheap” when I bought a house or three in the desert. specifically Palm Desert, CA. Now I’m curious as to your thoughts. Prices are still lagging and I haven’t been able to put my finger on exactly why, other than the Canadian Exchange Rate. I have decent equity in each of them, but I’m rather unsure as to whether I should continue to hold these properties, buy more. or divest myself of them all.

    Your thoughts have piqued my curiosity.

    1. If you have very little debt, you love where you live, and you plan on staying there for many years… then why sell?

      If you’re carrying multiple mortgages, you’re plan is to move soon anyway, and you’re looking for an excuse… this is a good time to cash out before the next cyclical market correction.

      For what it’s worth last year I sold all but two of my properties – my primary residence and a nearby country home. I may have sold a tiny bit too soon and missed out on slightly higher prices if the market continues to go up, but I prefer that to holding and seeing equity and solvent buyers evaporate if I wait too long.

      The financial crisis of 2008 wasn’t “solved.” There has been no “recovery.” The underlaying structural problems in the economy still remain. Instead the feds have spent the last decade re-inflating an asset bubble by cannibalizing other parts of the economy. It’s going to end badly for people holding debt. Cash is what you want on hand after the next crash. Then you can buy back in at a deep discount.

  2. Are the contrasting photos of McMansions under construction near abandoned McMansions from the Victorville area? I know that the financial companies holding those properties after foreclosure are often holding them back to try to prop up the values of the little they sell. You know there’s a lot of unrealized losses because after nearly a decade of abandonment some of those McMansions are going to be worth almost nothing not matter what market manipulations they do.

    I still can’t believe anybody would build things like a McMansion in a relatively remote and downscale area with a SEVEN-car garage, constructed to make subdivision difficult with the garages clustered. Seriously, who was supposed to buy that?

  3. Jiminy, take a second look at the 7th of your Detroit photos. I can’t tell if those are two brick structures, but the leftmost has been modified in ways code inspectors would likely not approve of. At the top of a steep outside stair there is a new apartment built into what was the attic. I don’t know how it’s heated, but it looks like there is a new chimney on the other side of it (so how does the fuel get up there?). The ironwork looks recent, but it doesn’t connect, as if each floor is separated from the other, and there are multiple trash bins indicating multiple apartments. That is one unique adaptation, post more photos of it if you have them.

  4. “One Huge Suburban Mississippi” LOL. I live on the edge…still close enough to the Bay Area and Sacramento and propped up by military spending. Yet…

    What is…amusing…about the Highway 99 corridor is the socioeconomic structure and politics are so very close to the Deep South. KQED had that clueless whining troll professor from some university in Fresno, Victor Davis Hanson is his name, on the radio. Same self righteous reactionary racist views one would expect from a professor living in Tuscaloosa. The irrationality and hate oozed over the radio.

        1. It doesn’t. Mexicans and central Americans aren’t a race, but a culture. Hanson clearly recognizes this.

        2. May I interject here guys? You could both be right…

          The agricultural economy of the Central Valley is predicated on cheap seasonal labor. Really, really cheap malleable temporary disposable labor where people are stooped over the fields all day in 110 degree heat for less than minimum wage. When the season is over the workers are no longer needed and are expected to just disappear. You won’t find native born white guys doing that kind of work at those prices.

          Other segments of the population who are ever so slightly better off don’t like having these impoverished folks around in their communities. Big surprise. These workers and their families end up in local hospitals, schools, and jails driving up costs to taxpayers, lowering quality of life, etc. All sorts of “law and order” solutions are proposed to manage the unwashed hordes.

          We as a society want the cheap labor, but we don’t actually want the people who do the work. Sounds a lot like Mississippi…

          1. Always interject! We can’t stop you anyhow. 🙂

            I don’t disagree with you that central California is comparable in some ways to Mississippi (California has the highest number of poor people in the US). And I think VDH would agree with you. It is one of the reasons why he complains so loudly. He wants where he comes from to be better than what it is. He wants the haves in California to actually care about the have nots.

            Interestingly, to make ends meet, some seasonal labor travels back and forth annually from California to say Mississippi, Louisiana, or Texas for the different harvesting seasons.

            Cesar Chavez himself wanted to limit labor supply to grow or maintain wages for his own farm workers.

            1. Border security and immigration enforcement could solve the problem of too many desperate laborers flooding the market and driving down wages. But how do you think the big growers and their friends in Sacramento are going to feel about that? This is a classic case of privatizing profits and externalizing costs.

              Serious wage increases for farm labor, a requirement for employers to provide health insurance, much higher quality standards for on farm housing… These steps would make it much less likely that farm workers would be a burden to the public coffers since the employers would carry the freight. But it would destroy the current business model for commercial agriculture. It would also be called Socialism and the Nanny State by exactly the same people who don’t want immigrants “sponging” off their community.

              So we have a structural problem. We demand cheap labor to do unpleasant work, but we won’t tolerate the workers themselves. The workers are vilified, not the larger system. Americans have always wanted a two tiered society and we’ve always wanted the people getting squeezed the hardest to be blamed for the unpleasant side effects of the system. It’s what used to be called the “Negro problem.”

              1. I don’t disagree that we have a structural problem. It’s a complex structure all of us have some kind of hand in. It probably only changes when future technology diminishes or eliminates the need for manual labor.

                Cultural differences are real and evolve/devolve slowly. The best we can do is love our neighbor. How best to do that is up for debate.

              2. Often forgotten that agribusiness was an early adopter of corporate welfare. Remember the 1960’s exposés of farm laborer exploitation? Add in huge subsidies for water and other farm inputs that allow otherwise uneconomic crops, coupled with protectionist tariffs, that mostly benefit corporate over family farms.

    1. It’s odd that Mississippi is a byword for economic wreckage. Geographically, it’s about like the Yangtze near Shanghai, one of the world’s most economically dynamic regions.

  5. Aren’t resources actually getting cheaper? I’ve heard people like Kunstler say that oil is going to $200 – well it isn’t. In fact there is a massive glut of oil, OPEC can’t get it’s members to stop producing oil, even as the price at the pump is around $2. And I know people will groan when I say this, but self-driving cars also makes transportation much cheaper. So where is this massive resource crunch going to come from? Not from natural gas, not from oil, not from expensive supply chains (which will probably only get cheaper), then from where? The only thing getting more expensive these days are houses in good school districts and health care. Neither is limited by costly or diminishing resources.

    1. First, I’m not in the business of persuading people to believe much of anything. You may very well spend the rest of your life living comfortably in the way you prefer without ever feeling limits of any kind. Time will tell.

      In the short term you’re right – everything appears to be getting cheaper and more abundant. Technology, creative finance, government policy, quantitative easing, near zero interest rates, et cetera have allowed society to squeeze oil and gas from low grade rock formations, tar sands, and ultra deep offshore deposits. But there have been unintended consequences. That’s one of the reasons so many people feel poorer and more desperate now than they used to. The hidden costs of cheap fuel are bubbling up in unexpected ways.

      We put a patch on resource constraints. It bought us some time. The next energy crunch will be a bit more difficult to patch, but more extreme measures will once again solve the problem – for a while. Then the next crunch and patch. Rinse. Repeat. We’re already well in to the cycle of diminishing returns on complexity as described by Joseph Tainter.

      Nicole Foss speaks more specifically about the financial aspects of energy extraction. She may be off by a number of years, but the overall trajectory is on track – in my opinion.

  6. Johnny,

    As always, an interesting piece. And some nice pictures – even if some of them are rather sad. Like Raton Laveur above, I hate to see things going to waste.

    Several times you’ve said in your blog that a lot of American suburbs are unviable in the long-term. That such places don’t generate enough wealth to maintain the distributed infrastructures – roads, sewers and the like – which support them and so, in due course, they will be replaced by something else. This is a fascinating idea – and one which I’d never previously heard.

    I suspect you’re right but, as Shakespeare said, the future is the undiscovered country. Perhaps something will turn up to enable such places to remain viable. Perhaps people will tolerate truly confiscatory levels of taxation, to maintain the places where they live the way they are. More likely, I suspect that people and local politicians will adapt to circumstances.

    You’ve said that one thing which would make many suburbs viable would be increased density. More economic activity per acre means more tax money to support the infrastructure. But such infill development is effectively banned in most places by local zoning laws. At the same time, people everywhere are looking for money from higher-up: cities are looking for money from the county; the counties are looking for money from the state and the states are looking for money from the feds. But a point will be reached, I suspect, when it will be realized that everyone – from the federal government downwards – is broke and no money is going to be forthcoming. At that point communities might shred their zoning books – or at least relax the rules a bit – to allow more development.

    1. The suburbs will endure for a very long time for the simple reason that we’ve built an enormous amount of the stuff. Tract homes, strip malls, suburban office parks, big box stores… it’s the overwhelming majority of the landscape almost everywhere. It’s absolutely possible – and highly probable – that most people will continue to occupy suburbia for the rest of this century. The real question is under what circumstances? I see small pockets of the best version of suburbia carrying on just fine for the people who can afford it. But a significant proportion will decline in value and not be maintained in the way we’re used to. Some can and will be reinvented with new infill construction. Many more will convert to a more rural and simpler pattern that functions on less money and a lower level of complexity. I don’t necessarily see that as a problem. The real problem will come when people insist on exhausting themselves on failed attempts to keep the old systems in place long after that stops being a realistic option.

  7. I love the blog. I was wondering how to identify areas “with the greatest underlying local resource base and most cohesive social structures relative to their populations.”

    Also, can you hold property in those areas as an absentee landlord? I imagine that you currently do this with your properties.

    I’m not ready to move. I have about 12 years to retire and i would have a hard time earning the same salary in those areas. However, I would like to own something in those areas while I live below my means in my current location.

    I really think there is potential in a lot of small pre world war two industrial towns that have hydro power and nearby agricultural. The question is which ones will be the winners.

    1. You can’t time the market. There’s no way to predict which town or neighborhood will increase or decrease in value. Don’t even try. However, there are plenty of places that are currently significantly undervalued that already have the qualities that make them great places to live for the segment of the population that likes them the way they are. Find a place you love that also happens to be cheap. Then do your tiny part to make your little piece of it slightly better over time.

      There are distinct drawbacks to managing rental properties from a great distance. But many properties can be found within a reasonable drive or train/bus trip from most metro areas. Weekend trips to a place that’s an hour or two away are different than places that are 3,000 miles away. If this is a destination you enjoy then frequent weekend visits won’t feel like a chore. Having reliable tradesmen on hand to troubleshoot is a huge help. Find good ones and pay them well. If you can’t manage property from a distance try partnering with a like-minded family member or friend who is able to live in a remote property.

  8. I enjoy reading what you have to say about how things are changing – like reading Kunstler without the angst and hysteria. Plus, your photographs are wonderful.

  9. One issue is the societal mindset that exists around the idea of “progress”. All of these moves will always be contextualized and justified as “progressive” (in one form or another). It ignores that “progress” is a myth; we live within Change.

    This belief tends to deny/reduce future flexibility; society sees the movement as something that is essentially an aspect of Necessity as we “advance” (where to is anyone’s guess). Instead of using the change to create the flexibility to adapt on a large scale basis, we instead make moves to control the perceived “need” and cast it into the same image that previously existed, continuing the power structures and control of the past.

  10. I always find it sad to see so many of these buildings (and the time and resources that went into them) being wasted like that.

  11. The hard bit to predict is the political upheaval that will come along with these changes (and maybe with little warning). That can really change the calculus. For example, the viability of farms of all types relies on the funding/buying/selling/subsidies rules in place. Even though 50% of US GDP comes from a handful of geographically tiny areas, they represent only 40% of the US population, and so on. As white flight reverses (to an extent) and the poor and marginalised find themselves much worse off by being pushed out to the aging, crappy suburbs, with even more disadvantages than when they were in inner-city ghettos (worse access to services and jobs, more expensive transportation needs, etc.), there may finally come a backlash that forces some kind of realignment of many systems. I think this could come in 5 years, 10 years, 40 years… Who knows?

    1. I fully expect a series of political upheavals as society adjusts to the new reality moving forward. We’ve been here before in 1941, 1861, and 1775. Count. That’s about every eighty years. We’re due for another such convulsion right about now. War is the mechanism society uses to restructure itself. Getting people to voluntarily switch to a new set of rules and procedures is hard. But wrap it in a flag and people mobilize. Once the dust settles everything will be different and we’ll all get on with life under the new system.

      Don’t assume all wealth will flow into big cities – even if that appears to be a minor fashionable trend at the moment. City centers will be hit just as hard as suburbs by the forces the future is likely to bring. The places that will hold up best over time are the ones that can supply themselves with critical essentials with less money and minimal complexity. Both dense centers and spread out development are critically dependent on fragile systems for daily life. On average, smaller scaled settlements of the kind built before World War II will hold up better.

  12. How do you marry your views on the suburbs with the fact that all the demographic data suggest the movement trends have reverted to what we saw pre-recession: the majority of people are moving to suburban communities in affordable cities in the southeast, Texas and the southwest.

    1. I’ll be writing on the ways in which some suburbs will be great places to live in the future, but not in the ways most people think. Stay tuned.

      To answer your question: There are suburbs and there are suburbs… Rave all you want about Sugar Land in Houston or the pristine new gated communities in north Dallas. For every upscale enclave with a lake I can show you a dozen lesser places that are deep in decline. “Experts” tend to live in the best possible version of suburbia and don’t see the failure just beyond the horizon. The thin strip of California where you can smell the salt air from San Diego to Sonoma may be booming, but the entire interior of the state from Bakersfield to Reading is one huge suburban Mississippi. And this is during an economic “recovery” when interest rates are effectively at zero and fuel is cheap. Take away the easy credit and abundant fuel and the suburbs struggle to survive. Big city centers won’t do well either. The burn rate is too high. My view is that this isn’t about what people like or want. It’s about what external reality can support. We may not want to acknowledge material limits, but sooner or later they will assert themselves.

      1. I live in Sacramento, a little blip of (reasonable) prosperity in the Valley. Surrounded by Folsom, Rocklin and Lincoln- home of the Mc Mansions.

        My 100 year old home is experiencing the benefits of gentrification. The home next door is Airbnb. The bluest among us want to secede from the union, while the State of Jefferson percolates just up north.

        The homeless are showing themselves in places never seen. Just a few blocks from the Fabulous Forties. Will they dare enter?

        At nearly 60, I am counting my eggs and pulling the plug in 18 months. I think the Muskenbergs will keep Cali afloat while I depart and let my rental home pay the bills.

        1. “Muskenbergs” Funny. Love it.

          35 years ago Americans voted for financial deregulation, regressive tax cuts and policies that greatly favored capital gains, rejected labor protections for people lower down the food chain, and accepted heavy debt loads that bought temporary prosperity in exchange for long term obligations.

          Surprise, surprise, some people got very rich while the bulk of the population stagnated or fell behind their previous status. Now people are mad at the rich as if they did this to everyone else all by themselves.

          Failure fixes itself. The pendulum is already in the process of swinging back. Just don’t expect it to be a neat and tidy process.

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