Friday, February 28, 2014

The Pastor's Half-Million Dollar Home

The letter came in the mail yesterday, one of the few dead-tree items that wasn't just materially manifested spam.

It was Fairfax County's annual assessment of the value of our home.  It's not much to look at, really it isn't.  Our domain sits on barely a quarter acre, just a tick over 1,300 square feet of finished space, a squat and ivy-covered four bedroom and three-bath bit of suburbia.  It's brick and cinderblock and over-braced, sturdy and solidly built, representing state-of-the-art 1961 homebuilding.  The bedrooms are small, and the bathrooms are tiny.  But really, honestly, how large does a bathroom need to be?  It gets 'er done.

When we bought in, fourteen years ago, it stretched us.  Two part-time nonprofit salaries adding up to the equivalent of one and a quarter full jobs, as we juggled work and babies and sanity?  That meant that we really pushed to get our way to the $249,000 asking price of the house.  

Then things went crazy, and prices soared to wild levels.  In late 2005, houses exactly like ours were selling for $600,000.  Then...like everything else in that debt-fever housing bubble...they crashed, and hard, dropping back into the mid three-fifties.  It was not an easy time for those who came after us.  At the top of our street, a home still sits abandoned, where underwater peak-purchase owners fled and left it after their insane mortgage proved unmanageable.

And now, the values are up again.  According to the county, our home is worth sixty thousand more dollars this year than it was last year.  Four hundred and sixty four thousand, to be exact.  Not sure if that's oversharing, but hey, the data is out there.  My Zillow Zestimate is even higher, at just about five hundred thousand even.  Half a million dollars.

According to the values of our culture, this is supposed to be a good thing.  That's a minimum of another sixty thousand dollars of home equity!  And fifteen percent in a year?  Thats a pretty solid annual ROI!

But I can't see it that way.  Perhaps I'm just stubborn, or insane.  Most likely so.  I just can't help but remember being in my late twenties.  I have not forgotten the self that I was, when a home was something we were striving for.

That means I can't look at the resurgent price of real-estate with any joy.  The housing market has recovered, chirrup those who tell us what we're supposed to believe.  But it smells wrong, and tastes wrong.

Sure, I benefit, I guess.  But my own profit is meaningless to me ethically.  Like I said, perhaps I'm just insane.

I know two things about home prices.  Because I follow the markets, I know that the rise in prices now is not being driven by new homeowner demand.  Houses are selling, sure, particularly given the still-low cost of borrowing.  But they are being sold to wealthy investors and business concerns.

And I also know that salaries continue to be stagnant for all but the aforementioned wealthy investors.  If most of us are seeing one-to-two percent increases in salaries annually...if we're lucky...and home prices are soaring?  All that means is that houses become more and more inaccessible to the young people who are where my wife and I were a decade ago.

So the rise in home prices is like the rise of the price of gas, or of milk, or of bread.  Something we all require to live is now more expensive?  Hardly a cause for celebration.

And that I benefit from it, in my own self?  Again, irrelevant.  Meaningless, particularly if I attend to the teachings of my rabbi.  As he clearly taught, compassion is not the friend of profit.

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