Last time out with the “Project Prepper” series of posts, after deciding that I’ll be moving out of Chicago and into the suburbs in the spring, I took a little bit of a detour and blogged about the “Mayan Apocalypse” that was supposed to arrive on December 21, 2012. Getting back on track today, approximately 4.5 months remain before my girlfriend and I plan to move, we still haven’t decided whether we’re going to buy or rent the suburban property in which we intend to reside in for the next few years (Wisconsin being selected as our ultimate destination).
Truth be told, I’m starting to lean towards renting- unless we can get our hands on a great deal. Even more so after reading a recent Forbes piece about “death spiral states” (hat tip Second City Cop). Back on November 25, 2012, former Forbes editor William Baldwin wrote on the website:
Don’t buy a house in a state where private sector workers are outnumbered by folks dependent on government.
Thinking about buying a house? Or a municipal bond? Be careful where you put your capital. Don’t put it in a state at high risk of a fiscal tailspin.
Eleven states make our list of danger spots for investors. They can look forward to a rising tax burden, deteriorating state finances and an exodus of employers. The list includes California, New York, Illinois and Ohio, along with some smaller states like New Mexico and Hawaii.
If your career takes you to Los Angeles or Chicago, don’t buy a house. Rent.
“If your career takes you to Los Angeles or Chicago, don’t buy a house. Rent.”
I didn’t insert those italics in the first sentence, in case you’re wondering.
Baldwin elaborated on the problems he sees with the “Land of Lincoln.” From the piece:
Illinois is especially known for its dishonesty, whether among officeholders (future license plate motto: Land of Corruption) or in the habit of under-accounting for promises to government employees. The Rauh study counted $66 billion in the till to cover pension obligations of $233 billion.
To lend money to California, Illinois or the other nine states perched on the precipice requires a leap of faith. So does buying a house in those locales. Don’t count on a property tax limit to protect your home’s value. If other taxes are high enough, there won’t be any buyers.
Definitely something for my girlfriend and I to chew on as we ramp up our housing search in the coming weeks. Although it doesn’t seem wise to purchase a home in a “death spriral state,” does it?
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Baldwin, William. “Do You Live In A Death Spiral State?” Forbes. 25 Nov. 2012. (http://www.forbes.com/sites/baldwin/2012/11/25/do-you-live-in-a-death-spiral-state/). 18 Jan. 2013.
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