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 cost only $9,000?

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 1970s. Your grandmother and I were in our early 20s, and we found a one-bedroom, one-bath house on 41st and Shafter in Oakland. And I know it hurts your little ears to hear it, but we paid $9,000 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 house someday. 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 percent. 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 three-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 were? Me (hugging them both): Maybe, Little Jimmy. Maybe. But don’t forget, my sweet munchkins — you’ll be in Detroit.

I will sigh, know- ing it will be hard for them to hear these stories. But it will also fascinate them, because it is so surrealistic.