Small Home Gazette, Spring 2008
Letter From the Editor: housing market meltdown
Until recently, the housing market meltdown hadn’t made much of an impression on me. The block I live on is quiet and stable. I don’t know anyone who signed onto one of those high-risk mortgages. And I have no immediate plans to sell my bungalow. So where’s the crisis?
But an eye-opener arrived recently in the form of my annual property tax value notice, showing that for the first time, my home’s estimated market value had dropped—from $196,500 last year to $167,000. I suspect a lot of Bungalow Club members got similar news.
Then I ran into a realtor who related some hair-raising tales. He’d recently seen foreclosed, unoccupied houses that had been stripped of architectural elements. He described taking potential buyers to view a house and finding it occupied by squatters. He explained a catch-22 in which first-time home buyers are interested in an older house, but the house has been rendered legally uninhabitable after copper plumbing was stolen by thieves. The buyers are willing to repair the damage, but the banks aren’t willing to lend them money for a house that isn’t in move-in condition. And the bank that owns the house has no intention of spending a dime to make repairs to a house they’ve already lost money on. Stalemate.
After hearing these anecdotes, I was seriously discouraged. It seemed that the hard-won respect for bungalows and bungalow neighborhoods was in danger of unraveling because of thieves, homeowners who’d over extended themselves, and lending institutions that care only about their bottom line.
But are things really that dire? I guess it depends on your particular circumstances (or your neighborhood’s) and on whether you’re a glass-half-empty type or a glass-half-full type.
I was reminded that annual market value estimates are used to assess tax and tend to be conservative—they don’t accurately predict what a home would sell for. And I learned there are mortgages available to qualifying first-time buyers that include an extra loan amount earmarked for basic repairs necessary to return a house to move-in condition.
In the end, about all we can do is hold on and wait for the housing market resurgence experts say will eventually come. That, and continue to promote the beauty, quality, and livability of bungalows and other vintage homes. Engendering an appreciation for these homes will help ensure they are valued through the housing market’s ups and downs.