Trina Kleist: Real estate downturn good news to working folk
Nevada County’s slipping real estate prices have a very bright side for many of us ordinary working folk who still harbor hopes of home ownership.
The problem we face is we may make good money, but California real estate prices have risen out of proportion to wages. Another problem is we spend our money on too much junk to save for a down payment.
I remember when the charging-bull stock market turned bearish in 1999. Market investors jumped into real estate. Their money, combined with the outlandishly high wages many Silicon Valley techies were earning at the time, pushed Bay Area prices to ridiculous levels.
It made headlines when bidders pushed up the price of an old, two-bedroom house in Palo Alto to $750,000.
People there and in Southern California sold at those prices and moved to Nevada County, pushing up the prices here.
When I moved here two years ago, I felt utter despair.
I checked out the affordable housing programs. Turns out I make too much money to qualify – though barely enough to make the house payment. I wondered how people with incomes low enough to qualify for those programs could possibly pay today’s mortgages.
Those programs also would curb the profit I could make if I were to sell the house later. That provision keeps the houses in the affordable program, but would cut me out of any significant gain in the value of my house – the closest thing I’ll ever have to a pension plan.
So, while many people wrung their hands over the new bear market as prices rose more slowly, then stopped, then turned slightly south, my mood perked up.
Last summer, I started looking in earnest – then despaired again.
Most houses on the market in my low-low price range are in very poor shape. My husband and I are only somewhat handy, and we can’t afford big repairs on top of a mortgage. Though if you’re in the trades, there are indeed some great deals and beautiful old wrecks.
I kept looking, and looking, and looking, and looking.
This spring, my bear market got bearish enough – and some sellers got desperate enough – that prices dropped to my level. Earlier this month, my little family moved into a little house on a little lot.
But the neighborhood is great, centrally located and offers good resale value. The house is in excellent condition and the garden is lovely – big enough for a grill, a vegetable garden and a couple fruit trees.
I am encouraged by Grass Valley’s City Council sometimes asking developers to bring in plans for houses ranging from 900 to 1,500 square feet. That would offer market-based options for people like me.
I’m also encouraged by the council’s emphasis on open space and good design, so we working folk have some beauty in our neighborhoods. But I see that, in the “poor” sections of those developments where people like me live, we often don’t get sidewalks, garages or even carports.
The Wildwood Ridge development approved last year by Nevada County’s Board of Supervisors also offered more low-end options.
Another problem people like me face is, many of us don’t save our money.
I did, and that’s the only reason we were able to buy our little house. I had a big down payment, made bigger by having put a smaller down payment into a condo six years ago in San Diego, when prices there still were relatively low.
But it had taken me about 15 years of thrifty living to get there. I can remember looking around that condo and thinking, “This is every movie I never saw, every concert I never went to, every pair of new shoes I never bought, every dinner out I never ate.”
I’m grateful to my parents for teaching me young the values of hard work, frugality and home ownership – though that may not be enough for other working people in Nevada County.
It’s interesting that what’s good for the economy – consumer spending – turns out to be not so good for many of us consumers. I wonder what the long-term consequences of that could be.
To contact City Editor Trina Kleist, e-mail email@example.com or call 477-4230.
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