Housing ho!

We’ve finally started looking for a house. I cannot be trusted with the family finances, so Kat wisely stepped in several years ago, assessed the debt, started eliminating credit cards, paying off student loans, and even getting consolidation loans to do both of the aforementioned tasks quicker. It worked — it’s been five years or so of smart planning, but the credit cards are all but gone, the student loans are ancient history, and our credit scores are extremely good — Kat’s is 749, mine’s 798. We’re first-time buyers, and we’re ready to move in more or less immediately. And this week we got pre-approved for a mortgage. This was cause for celebration. We went to Chipotle.

The Bay Area housing market has been not so much a rollercoaster ride as an attraction that would get an amusement park condemned. Instead of going up and down in a series of natural or predictable peaks and valleys, the housing market, since I got to California in 1996, has gone up. Then, it went way up. And a bit later, it climbed significantly. After that, it went up. Against all logic, against all national averages, against the threat of half the state sliding into the ocean with one big catastrophic shake, housing prices steadily rose. We went looking at some open houses about six or seven years ago just to start planning for the future, and houses that could only be described as dumps — creaky edifices in bad neighborhoods with water damage and substandard electrical wiring, not to mention tacky wood paneling straight from 1974 — were going for half a million bucks…but only if you acted fast. A decent 3BR for a family? $1.2 million. So, we rented. And rented. And watched the housing prices climb higher still, and actually started dreaming about what life would be like if we had only bought that craptacular dump when we had the chance. We consoled ourselves by letting Kat’s Magic Money Mojo do its thing, praying for the Second Coming of Sanity.

This year, the housing market finally went to shit. Bad lending practices and risky loans backfired on everyone involved, leaving people without homes and banks with a lot of buildings that they didn’t necessarily want. Foreclosures spread like the flu. The $1.2 million non-mansions suddenly dropped to $800K, which means the houses that used to be $800K started scraping significantly south of $500K. And if any of those have 2 or 3 bedrooms, we’re interested. (Note: The multiple bedroom thing does not mean we are having children. This means we need a home office and/or a large room for Kat’s creative works. More on that in a bit.)

Today we went out and saw five houses. We had only planned to see two, but there were so many realtor signs advertising open houses that we actually couldn’t stop finding them as we drove around nearby neighborhoods. Of the five, we saw only one that we kind of liked, acknowledging that it was overpriced (it has only been on the market for two days, so we figure…check back in a month) and it needed more work than any of the others. But it had charm, and it had hardwood floors (which needed a complete refinishing) and room for arcade machines and poker tables, the potential for a secret passage (always a lifelong dream), and a freestanding garage that could, with great time and investment, be turned into the combination dance and photo studio that Kat has always wanted. Such a space needs to be at least 20 feet long and have decent ceilings. We have…unusual needs as homeowners. But the good news is, thanks to our excellent credit standing combined with other people’s foreclosure misery, the selection is actually pretty good.

And it feels weird to benefit from that misery. We were in one house that was quite nice today — walking distance from the mall and BART, garage for arcade and laundry machines, sizable back yard, cool color (purple!). The cheery realtor let us know it was a short sale, so the price had been lowered significantly and they were looking to close a deal fast. But if you don’t find it slightly heartbreaking to see hallway photos of three small children, and walk into their rooms with brightly colored fish all over the walls (but no bed frame for the mattress on the floor) and think to yourself “Wow, this would be a great place to put my Xbox 360 and HDTV,” you are dead inside.

For me the final chilling blow was walking into the master bedroom and seeing a paperback book on the shelf. It was called The ABC’s of Getting Out of Debt. It had been borrowed from the library. And on the closet door was a list of sentences in Spanish. I was able to pick out that they were daily affirmations, phrases like “I will try to do my best every day,” but my heart dropped when I figured out the sentence “I will be professional in my dealings as a representative of Mary Kay.”

I’m ready to buy my house. But I’m not sure if I’m ready to buy someone else’s home.

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