DREAMING THE DREAM
OF HOME OWNERSHIP
I only have one grandchild, and she can't talk yet (or do much
of anything), but if I had a couple in the vicinity of 12 years old, I
expect we'd have the following conversation:
Little Jimmy: Grandpa, explain to us again why we'll
never own our own home.
Me: That's not true, Little Jimmy. You can own your own
home someday. You'll just have to move far, far away.
Little Susie: (starting to cry) But I don't want to
leave my friends and family.
Me: (patting her little head) Don't be a crybaby, Little
Susie. You might like Reno. Or Detroit. Or North Dakota.
Little Jimmy: I don't want to move, either. I want to
stay in the Bay Area.
Me: You're dreaming, kid. You also want to be a fireman.
Get a grip. You'll never be able to afford a home around here.
Little Susie: (drying her tears) Grandpa, tell us again
about when you bought your first home. Did it really only cost $9000?
I will sigh, knowing it will be hard for them to hear these
stories, just like it was when I told my children. But it will also
fascinate them, because it is so surrealistic.
Me: It was a long, long time ago, in the late 1970's.
Your grandmother and I were in our early 20's, and we found a 1 bedroom, 1
bath house on 41st and Shafter in Oakland. And I know it hurts your little
ears to hear it, but we paid $9000 for the whole house.
Little Susie: Mommy's car cost more than that!
Little Jimmy: (sensing an opportunity) What would it
sell for now?
Me: Probably more than you could ever afford. We sold it
a year later for more than we paid, and bought something else. Then we sold
that and bought something else. It was loads of fun. Too bad you kids won't
ever have that opportunity.
Little Jimmy: (pouting) It's not fair. I want to buy a
Me: Too late, kiddo. But if it makes you feel any
better, it's too late for your Mommy and Daddy, too.
Little Susie: That doesn't make me feel any better. And
I don't understand--- they make lots of money.
Me: Not enough for around here. Unless your Daddy or
Mommy starts a successful tech company, or wins big in the lottery, you're
all destined to pay exorbitant rents forever if you want to stay in the Bay
Area. Owning a home is out of the question.
Little Jimmy: (showing incredible financial acumen for a
12 year old) If interest rates rise and the new tax law limits property tax
write offs to $10,000, won't that lower real estate values?
Me: Good question, Little Jimmy. Maybe a little. But you
still won't be able to afford Bay Area prices. When we bought our first
house, interest rates were close to 10%. It didn't stop prices from going up
in the Bay Area.
Little Susie: Grandpa, you're supposed to encourage us
in life. Why are you being such a jerk?
Me: Sorry, Little Susie. I'm just telling it like it is.
Your generation got royally screwed.
Little Susie: GRANDPA!
Me: Excuse my bluntness, but it's true. My generation
could buy a house for peanuts, make no improvements, and sell it for a
ridiculous profit years later. Your generation is stuck using all your
income to pay thousands per month in rent for a one bedroom apartment. But
no one said life is fair.
Little Jimmy: (pulling out his laptop and typing away)
Check it out, Little Susie. Here's a 3 bedroom house for sale for $45,000.
And here's another one for $69,000. I can still be a fireman and own my own
house after all.
Little Susie: (eagerly looking over Little Jimmy's
shoulder) This is so exciting. There's another one for $54,995. Grandpa is
right, as usual. Mommy and Daddy can buy any of these houses right now. All
we have to do is move to Detroit.
Me: (beaming) I'm proud of both of you. The American
dream of home ownership is alive and well. Just not around here.
Little Jimmy: Grandpa, if we buy this Detroit house for
$45,000, will it be worth a lot more in a few years, just like your houses
Me: (hugging them both)Maybe, Little Jimmy. Maybe. But
don't forget, my sweet munchkins---you'll be in Detroit.