Young professionals, first-time buyers are nowhere close to
being able to afford a home
Amber Berg invested six years in an education she assumed would
be the path to the American Dream. Then she moved to Hollister.
Young professionals, first-time buyers are nowhere close to being able to afford a home
Amber Berg invested six years in an education she assumed would be the path to the American Dream. Then she moved to Hollister.
Berg’s pursuit of a house to call her own couldn’t prove more difficult. Though Burg is a fifth-year teacher with a master’s degree, she failed to meet the requirements for a mortgage she could afford.
Even when she was looking at houses with another teacher, the best they could qualify for with two teacher salaries was a townhouse.
“It’s disappointing paying rent to live in a house with two other girls when I could be paying a mortgage,” Berg said.
Even more frustrating for her is that when Berg moved to California from Minnesota she had no idea that the housing market was as prohibitive as it is, especially in Hollister.
“I moved here because I wanted to live somewhere outside of Minnesota, so I took a chance and Hollister was the first school that called me back.”
If Berg were still living in Minnesota, she has no doubt that she would be able to afford a sizable house for a fraction of the cost of what a smaller house goes for in Hollister.
She said that her sister recently purchased a house for $122,000 and that a friend who lives in a smaller, more rural town outside of a major city purchased her home for $80,000.
“Going home and telling people that a three-bedroom, two bathroom house costs $500,000, they can’t even fathom it,” Berg said.
Actually, if she could get at three-bedroom, two-bath home in Hollister for anything south of $600,000 would be a minor miracle. The price of real-estate makes it nearly impossible for Berg to consider staying in Hollister, or anywhere in California.
“It makes it difficult to consider staying here. The nice thing about San Benito High School is that it has a good pay scale and benefits and I really like my colleagues,” Berg said.
Since the time they started looking for a house, her friend with the dog that needed a big yard has moved on, so she could look at a smaller property, but Berg still wants in to the real estate market.
“I’m a professional woman in my career I want to be in on the American Dream,” Berg said. “Now I’m waiting for a Plan B, I don’t know what that is. Maybe I’ll start shopping again. You almost have to start with a townhouse just so you can get some equity.”
Berg isn’t alone in her frustration. Since 1981, executive pay has been rising at a rate of nearly 7 percent a year, according to a joint Harvard/Federal Reserve Bank study. Last year alone executive pay was up 27 percent. Workers, meanwhile, had to contend with a 0.8 percent rise in pay during that same time, which is why your boss can afford a home but your children’s teacher can’t.
On the other side of town, Martin Defee has lived in Hollister for seven years, but a new job has taken him out of Hollister and into the Central Valley. The only thing standing in his way now is the inability to sell his home.
Defeee, his wife and five children have had their home on the market for three months, but have only had one offer, well below what the family is asking.
“We started at $714,000 and dropped to $699,000, but we haven’t gotten any reasonable offers. The only offer we had was $600,000,” Defee said. “I never thought it would be difficult finding a buyer. Hollister has always had a good attractive market. When we first purchased our home we bought for $280,000 and we saw the value increase steadily annually. Last year it was valued at $714,000. Then it dropped. Now we’re having to compete with people selling for $50,000 less.”
What the Defees are experiencing is a common occurrence throughout Hollister and the rest of California.
The per capita income for San Benito County is $60,000, yet residents would need to earn more than $100,000 for any hope of affording an average house here, according to mortgage brokers interviewed by The Pinnacle. Or put another way, the average working family in Hollister would be able to afford a mortgage loan for a $350,000 home. With the median home price in San Benito County hovering around $570,000, the American Dream is more than $200,000 away for most residents.
Some in the real-estate industry refer to this as a “balanced” market. Berg, however, sees nothing balanced about it.
