“You’re probably not going to like this,” David Dale Johnson said, “but I’m suggesting we ask the Board of Review to reduce the assessment by $30,000.”  I had retained David as a hired gun in my attempt to get our house’s assessment, and thus our property taxes, lowered.  David knows a thing or two about the protest process: He spent eight years on the Winnebago County Board of Review and personally developed the form currently used to request a change in assessment.  When we purchased our current house eight years ago, I’d gone before David and the board and lost, though the state board of review reversed the local board’s decision.  In the intervening years, however, our assessment has crept up by $30,000, and it is time to try to bring it back in line with reality.

I would be lying if I said that it wasn’t a little disheartening to learn that the reality is that our house is worth about what it was when we purchased it.  I’m from a generation whose parents believed that real estate was generally a solid investment, but if I’d wanted zero-percent returns, I could have put my money in Microsoft stock eight years ago instead of in a house.  But, as my wife likes to remind me about my comic-book collection, you don’t make any money on an investment until you’ve sold it, and we’re not going anywhere.  This house is truly our home, and so we’ll continue feeding the money pit until the day our children grow up, tire of us, and send our Alzheimer’s-addled bodies out to pasture.

So there’s no sense in paying a premium in taxes, in the vain hope that an inflated assessment might sucker a potential buyer into overpaying for a house we don’t intend to sell.  We’ve refinanced twice since we bought the house, and our current mortgage will be paid off in just a bit over ten years.  When I have money to invest, I stick to my tried-and-true Apple stock.

Here in Rockford, the housing market was largely unaffected by the real-estate bubble.  High property taxes (the highest in the nation for a few years in the late 90’s) kept prices down, and when the 13-year-long Rockford school-desegregation lawsuit (the source of those high taxes) ended in June 2002, there was only a brief five-year period in which our housing market had a chance to try to catch up with the rest of the country.  Average selling prices rose, and assessments increased at an even steeper rate, but by the time the bubble burst in late 2007, housing in Rockford was still more affordable than in almost any other American city of its size.

You might think that having less far to fall would have made the collapse more gentle.  Think again.  As in the rest of the country, many homeowners in Rockford were overextended on their second (and third) mortgages, having fallen captive to the siren song of real-estate agents, bankers, and mortgage brokers who said there was no danger in taking on a no-money-down mortgage based on two incomes and valued at 120 percent of the market price of the house.  A 30-year mortgage is the cheapest cash you’ll ever borrow; real-estate is historically a good investment; might as well get as much house as you can, and consolidate your credit-card debts in the process.  Pay no attention to that man behind the curtain.

And then the housing bubble burst, and the stock-market bubble burst, and the Rockford area lost another 8,000 manufacturing jobs, and the local unemployment rate has stayed in double digits for the longest period since it has been tracked.  The high-tech and service-industry jobs that were supposed to replace the ones we lost to China have never materialized, and suddenly Rockfordians are sitting on mortgages they cannot afford.

Low housing prices are good, for those who are looking to buy now; but they can be devastating for those who are five years in on a 30-year mortgage when their job is shipped overseas.  One partial solution is to take advantage of historically low interest rates by refinancing, but to do that, you have to convince an appraiser that your property is worth more than you currently owe.  Yet even many of those who played it relatively safe and put, say, ten percent down five years ago are finding that they still owe more than their house is worth today.  They’re under water, and no bank today dares to toss them the life preserver of refinancing, even if it would mean keeping a family in its current home.

And so, as I walk back and forth to work, I increasingly see a sight familiar to me from a decade ago, when NAFTA was devastating manufacturing in the Midwest: The entire contents of a house piled high in its alley, waiting for the garbage men to haul it to the dump, after a family has simply walked away from its mortgage.  The difference now is that the area I’m walking through is one of the better neighborhoods in Rockford, not the marginal neighborhood our first house was in.

A rising tide lifts all boats, the supply-siders used to say; but a storm that’s strong enough can sink even the Edmund Fitzgerald.