This is pretty funny, “How the pandemic housing market spurred buyer's remorse across America." I’ve been predicting this almost from the moment house buying became a trendy thing to do. Looking at those lines of young people stacked up in front of some obvious “fixer-upper” provided me with many moments of entertainment in the last couple of years. The couple interviewed for the start of this article said, “Every time something does come up, I say to my husband, 'Maybe we should be renting.' Like, if only we were still renting, then the landlord could deal with this." Go figure, houses need maintenance and a generation who have spent much of their time complaining that every other generation had it easier while living in their parents’ home are discovering what every other generation knew early on, “Life is hard, then you die.” In the middle, there is maintenance.
I get bored sometimes and start prowling Zillow, almost randomly. Today, I decided to look up my parents’ first house in Dodge City, Kansas, an 800 square foot place built in 1950 that they moved into when I was 3 (’51). I believe they paid about $5,500 for it. Dad’s teaching/coaching salary at the time was $2,200/year plus he had various summer jobs that probably added another $300-$350 to his annual salary, at best. The minimum wage was $0.75/hour then and most jobs, especially part-time jobs, paid that. Supposedly, that house is worth $75,000 today, although the only house for sale in the immediate neighborhood is selling for $60,000 and has been on the market for more than 100 days. Asking price and selling price often differ in rural areas. The house is for sale is larger place with a larger lot, so it’s probably worth at least $10,000 more than my parents’ first home. The “rich family” in our neighborhood, lived diagonally across from us in a 1930’s 1100 square foot, 4 bedroom, 1-bath house and there was a small “park” in the lot next to us (it was a corner house). Our rich neighbors had the first television I ever saw. We didn’t have a TV in our family for another 5-6 years.
The cool, interesting thing I found today was the official Dodge City “rich family’s” house is for sale now. The family that owned this place had been in large scale construction since the 20’s. They built this place in 1938 (according to Zillow). I was in that house once, sometime around 1970 to repair a television set. I was still in tech school, but my instructor had recommended me for the job. I don’t remember how that played out. I’m sure it was a tube set. Odds are good that the repair was fairly simple.
When I left Denver in 1996, there must have been 10,000 houses being built that were bigger, fancier, and more expensive than this Dodge City mansion, just around my neighborhood in Parker. My daughter used to give me crap for owning a “tiny” 1,400 square foot house. I thought the place was ginormous, especially when I had it all to myself.
I also did a price search on Minneapolis, the most expensive city in Minnesota and found a lot of perfectly nice homes (800-1100 square feet, like my current house) and my parents’ house in Dodge for sale at well-under $200k, some close to $100k and a few under that. With today’s microscopic interest rates, a $150k house is about a $550/month Zillow-estimated monthly home cost.
I think the problem most young people have is that they want to start off where previous generations ended up and they keep spinning fairy tales about how easy earlier generations had it. Having worked my way through to a degree, nights and weekends, I’m not particularly sympathetic to kiddies who think their over-priced but worthless liberal arts degree/party animal school debt should be paid off by the rest of us and I really doubt that these kids are going to do well with managing and maintaining a home if they manage to buy one. Even when their parents’ do all of the up-front financing and work, these snowflakes will be overwhelmed by homeowning responsibility.
The characters who bought our house in Little Canada are good examples. When we were selling it in 2015, a realtor told me that the trick is to make it look as if nothing needs repairing. “The house should look like a ready-to-move-in apartment and a blank slate so they can imagine their own stuff in the spaces.” So we emptied the place out, painted almost everything white, and polished every surface so that they looked totally unused.
I had some doubts about selling the ready-to-move-in aspect of the 2 1/2 acre lot that came with the house. I mean, how can you make a small farm look maintenance-free? The realtor said, “Don’t worry about that. It’s part of the dream.” She was right. The buyers and their goober “inspector” nitpicked all sorts of silly stuff in the house, most of which I ignored, but they didn’t ask a single question about maintaining the large yard and several gardens. Stupidly, I left them a riding lawnmower and a shed full of lawn and garden tools. A year later, one of our ex-neighbors was visiting and among their many stories about our home buyers were all sorts of hilarious bits about those kids wading through waist-deep grass in the backyard, finally asking another neighbor to mow the lawn for them because they couldn’t figure out how to start the one I left them (the battery was in the garage for winter storage). They even rented a large lawn tractor, but couldn’t figure out how to get it off of the rental company’s trailer. Again, that same neighbor bailed them out. Six years and a divorce later, they sold the house to another young couple who immediately asked their helpful neighbor, “I heard you take care of the yard in front of our house?”
My own kids are also good examples, unfortunately. One of them moves when the dishwasher drain needs cleaning and the other will literally go without a functioning kitchen sink rather than either fix it or pay to have it done. Even maintaining bicycles seems to be a family disability. Clearly, I suck at leading by example.
There is a “1% home maintenance budgeting rule” that few people want to acknowledge. (The formula is something along the lines of “Annual maintenance costs will run about %1 of the value of the house.”) From my experience, that number is conservative for landlords. Renters are destructive, often entitled and spoiled children, and sometimes outright crooked. I don’t think I ever escaped paying only %1 maintenance costs on the two rental properties I owned. 5% was probably closer to the real number.
Obviously, I know a few young people who are doing fine with all of the adult life stuff, but none of them are bawling about how hard their lives are compared to earlier generations. They buy “starter homes,” fix ‘em up, and trade up when they have some equity; like most everyone did before them.
Yeah, I know the major cities are expensive, especially in the ‘burbs and the desirable urban areas. And they always have been. In the 80s, I could barely afford a 750 square foot, 2 bedroom apartment in Huntington Beach, California on $80k/year ($1600/month no utilities included when I left in 1991). That is why I left, among other unaffordable things. Just like every generation in the last 150 years, young people want to get out of the country and move to the cities where there is stuff to do and jobs to pay for the stuff. With an additional 100 million people in the country, from 1983 when I moved to California, there is a lot more competition for city housing everywhere. As someone recently said, “Housing prices in coastal California are almost comical.” Finding a house that costs less than $1M almost anywhere urban along the coastline from San Diego to San Francisco might be impossible. Just like it has been my whole life, everybody wants to live in California, even the rubes who pretend they don’t (because there is no way in hell they ever could).
Not even a little bit surprisingly, it costs a lot less to buy a house in a small town and there is no shortage of rural housing. Also, there are a lot more ways to make a living in those places; even Kansas! So the argument seems to be “It’s too expensive for me to live where I want to live in the kind of luxury I expect.”
Well isn’t that sad?
Life does suck for unskilled minimum wage workers, especially the ones who imagine they deserve better; the theme song for white entitlement. My aunt, my mother’s younger sister, lived in Minneapolis in the 1950s with her 1st or 2nd husband. They were both restaurant/bar employees, and that was her “career path for life.” All she remembers about Minneapolis was being cold all the time. They lived in a drafty apartment, barely able to keep the lights and heat on and always scrimping to get by. I don’t think they were in Minneapolis a whole year before they retreated to small town Kansas and she didn’t leave her hometown until she remarried in her 60s. Minimum wage in 1950 was $0.75/hour ($28/month at 40 hours).
I moved to Dallas in 1967 and the minimum wage was $1.40, but my department store job wasn’t covered by minimum wage and I made $1.10 ($41/week) as a drug department manager. Ms. Day and I lived in a very small, single-car garage “apartment” that cost $10/week for the first year we were together. $10 for rent, $10 for my tech/computer school tuition, $10 for food, and $10 for taxes, transportation, and everything else was a budget I will never forget. The first time we had a meal in a restaurant together was a half-dozen years later, in Hereford, Texas. A friend who had a field service job with one of my ex-employers would come through Hereford and take us out to dinner at a hotel restaurant, on the company dime. (They wanted to hire me back.) That was roughly when our first, Holly, was born in mid-1971. That restaurant meal was a big deal for me, although Robbye’s family (military and government jobs) were pretty used to travel and restaurants. She married way down and I was way out of my league. A few years later, we were dining out at McDonalds, Burger Chef, and the occasionally truck stop restaurant once a month at most.
We bought our first house in 1973 for about $8,000. It was a ramshackle, two-story 1920s frame house in Central City, NE. I was making a red hot $126/week at 40 hours, but I worked 80-100 hours a week. So, with overtime, I was usually bringing in close to $200/week by 1976. Our house payment was probably about $70-80/month but the place was a wreck and I rebuilt it from the plumbing in the crawl space to the 2nd floor bedroom ceilings; or from below-ground-up to the roof. About my only real memory of the place was holding ¾” sheetrock up to a sloped 2nd floor ceiling with one hand and pushing nails into the sheetrock with my right hand thumb, followed by driving them in the rest of the way with a hammer I gripped in my teeth. Today, I can barely drag a 4’x8’ sheet of 5/8” into the basement by myself . Mostly, I slide it along the floor.
You could buy that Central City house for $35,000 today and we sold it for $16,000 in 1976. Our next house cost $20,000 in ‘76 and when the ag floor collapsed around 1980, we sold it for $20k. However, I had to give the “buyers” $5,000 under the table so they could fund the down payment. Between cost of materials, sweat equity, and an actual $5,000 loss, I don’t want to think much about how much economic damage home ownership did to us then. We moved to a small town in northeastern Nebraska where a friend rented us a ramshackle 1900’s 2 bedroom house for $80/month plus bills. That house had actual “central heat,” a large natural gas stove in the middle of the house that barely kept that room and the kitchen from freezing. The windows on our bedrooms, the bathroom, and the mud room regularly had a 1/4” layer of ice on the inside panes. I replaced our washing machine pump several times when the room froze and split the pump and hosing.
I didn’t have a shot at owning another home until I moved, as a single guy, to Colorado in ’91. Denver, as is usual for that town, was the first to crash in Reagan’s recession, crashed the hardest, and was among the last to recover (lucky for me). I bought a home that was built in 1981: 1400 square foot “3 bedroom,” two bath, single car garage house for $71,000 (It sold for $180k new, a decade earlier.). I put the 3 bedroom in quotes because one of the bedrooms was sized about right for a dresser, a lawn chair, and a military cot.
I desperately wanted to keep that house for the rest of my life, but we moved to Minnesota and I tried renting it for several years. After being a landlord, it’s pretty tough for me to generate much sympathy for renters, though. All three sets of mine were given a lot of latitude and all they ever did was shred the property and whine. The characters I was stuck with for renters wrecked the house badly enough that I gave up on it and sold it in 1998 for $108k. I had zero luck finding a Denver rental manager who wasn’t a total deadbeat and crook. Supposedly, that house is worth a half-mil now, but the house and the neighborhood are dramatically improved now. It has gone through a few owners since and I suspect I’d have given up on it in the Recession for lack of rental income, the low quality of rental candidates, the long-standing problems with lack of active policing in the area and the resulting squatters/vandals/meth cooks, and the fact that I was marginally employed in those years.
I almost owned the place, when I sold it; having made double and triple house payments for the 5 years I lived there and putting all of the rental “income” straight into the principle for the next 4 years. Even getting screwed, as usual, by realtors I came out of the sale with about $70k in cash. As much as I liked the house and regardless of how well that area of Denver has done in the last few years, I did even better with the investments I made with that $70,000. Denver is so overgrown, under-resourced (especially water), and crowded I wouldn’t want to live there now, anyway.
Over the several houses I’ve owned in my 70 years, I’ve learned a lot about home ownership, maintenance, and unanticipated problems and costs. None of it has been painless, most was expensive and time-consuming, and a little heartbreaking. Homeowning, like life, “is hard, then you die.”
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