I’ve been living abroad (okay, Utah, but it feels like a foreign
theocracy) for the last two and a half years, and returning to
California has been a mixed blessing. Let me state first,
unequivocally, that I’m thrilled to be back.
I’ve been living abroad (okay, Utah, but it feels like a foreign theocracy) for the last two and a half years, and returning to California has been a mixed blessing. Let me state first, unequivocally, that I’m thrilled to be back. I’m a fifth-generation Californian, love this state, and it’s the best place anywhere.
But that’s the problem. I’m not, apparently, alone in that opinion. The “mixed” part of the blessing is the cost of housing. The three most important things about buying a home are no longer “location, location, location,” they’re now “money, money, money.”
When my great great grandfather William Wilhite came to this state in a covered wagon in 1857 with his pregnant wife Sara and two kids, finding affordable housing wasn’t much of a problem. At the time he crossed Pacheco Pass (also know at the time as Robber’s Pass) on his way to Ukiah to build a Methodist church, there were only a few sheep ranchers in this area. San Justo had not yet morphed into Hollister.
Since then, and especially in the last few years, Hollister has morphed into something else, along with the rest of California: a housing nightmare, and not just for newcomers. The descendants of those early ranchers may be proud of their San Benito County heritage, but without financial help from their families, the latest generation will not be able to afford to stay here and carry on the tradition.
The price of housing has gotten absurdly out of hand, and like Mark Twain’s admonition about the weather, no one seems to be doing anything about it. And it’s only partly fueled by average people trying to find a place to live. There is ample anecdotal evidence that a significant portion of the run-up in prices is due to speculators “flipping” property for short term profits.
If you’re old enough, you have the benefit of historical perspective. But nostalgia for that first cheap college rental decades ago doesn’t advance the issue.
Still, it seems relevant to me that only seven years ago in Capitola I could afford to buy a two-bedroom condo on a reporter’s salary. I made 25 percent less that I make now, and had just 25 percent of the down payment available to me that I have now.
To buy the same home with the same monthly payment today in Hollister, I’d have to double my salary, or my down payment. As for buying anything ever again in Capitola, I guess I had my chance.
So now you can assume that the new city editor of this paper ain’t too bright.
If you don’t think we’re in a housing bubble, then the Supreme Court would like to know what you’re smoking. Even the circumspect Fed Chairman Alan Greenspan spoke recently, and with rare imagery, of a “frothing” of the housing market. It has become a game of musical chairs, and woe to those buying on little equity and with interest-only loans when the music stops.
Don’t think it can happen? It did as recently as the early 1990s, when the California economy tanked and the housing market went with it. Normally the kind of cheap credit we’re experiencing right now – and which is driving the market – would be impossible with a federal government like this one, which refuses to live within it means. If it weren’t for the Chinese buying our debt with cheap Yuan, interest rates would be through the roof.
It’s hard to find a constituency in the housing industry for cooling off the market, when so many people are getting rich. But as sure as the tech bubble burst, this one will too, and we’d best find ways to do it as painlessly as possible.
I don’t have the answer to that, but it doesn’t really matter. Markets don’t always behave rationally, and this one certainly isn’t. We need more housing, but building our way out of the problem alone wouldn’t solve the problem, even if there were no sewer moratorium in place.
But one thing we can do is try to change the market’s psychology. Our bias should be to make housing as available and affordable as possible.
As one of those whose ancestors came here a long time ago, and who has also recently moved back, I can sympathize both with newcomers and with younger members of older families who are having trouble buying their own homes. Something has to be done. As for the weather, I disagree with Twain. Let’s leave that alone.
John Yewell is city editor of the Hollister Free Lance. Reach him at
jy*****@fr***********.com
.
