Pray That the Housing Boom Stays Dead

Here’s a story from the good old days.

It’s midsummer of 1988, and a friend of mine is trolling the streets of Studio City, looking for a house. He and his wife are first-time buyers. The hunt is not going well.

Studio City is where I live, so they drop by my place late on a Sunday afternoon. Their faces have a shocked look, the kind of expression people get when the coyotes have eaten their cat. We sit on the back patio and my friend asks for gin. I get the gin. Then he announces they won’t be coming to live in Studio City after all.

How come, I say.

My friend glares at me. He thinks I am enjoying their agony.

They’re not going to live in Studio City because they can’t afford it. Am I aware, he asks, that my house has gone up 10% in the last month?

No, I am not aware. I know the market has reached a state of high fever in the summer of 1988, but Studio City is hardly Bel-Air. Ten percent in a month? I feel a tingling at the back of my neck.

As soon as they leave, I trot over to the phone and call my real estate agent. Is it true, I ask?

Yes, he says. Not always, not with every house, but mostly, yes, it’s true.

I walk back to the patio, gaze at the paint peeling from my window frames, and do some crude arithmetic. The arithmetic of the boom. I conclude my place has made me $40,000 in the last month, minimum.

A lightheadedness sets in. I try to picture a stack of $100 bills that would total $40,000. A big stack, surely.

And I imagine all those people without houses, people like my friends, crawling over the neighborhoods, trying pathetically to catch up with this money train. Lotsa luck, I think, and snicker. Either you made the move at the right time, or you didn’t. Either you’re in, or you’re out.

Then it hits me. At some level, my friend had been right. I had, just a little bit, enjoyed their agony.

The boom is gone now, of course. Those days don’t happen anymore. A couple of months ago I saw a report from the folks at TRW that said house prices in my neighborhood had headed south. Somehow, this time, I managed to forgo the arithmetic. Here, and in Orange County, and in San Francisco, the money train is dead on the tracks.

I know there are optimists among the boomers who say this pause will be temporary only, a short rest stop. Maybe so.

But let me suggest we should hope otherwise, and pray the boom stays dead. In ways that were subtle and not-so-subtle, it corrupted us all.

I know this ranks as a mild heresy. By way of explanation, let me pose two questions, one for homeowners and the second for--oh, let’s be polite--the Not-Yet-Propertied.

Homeowner question: During the boom years did you ever find yourself wanting desperately to leave Los Angeles because it’s dangerous, filthy and a threat to the kids, only to think to yourself that, no, you’d stay, because your house was making so much money that it overwhelmed all other considerations?

Not-Yet-Propertied question: During the boom times did you ever consider staying away from a dinner party with friends because you knew the evening inevitably would involve a round of gloating by the homeowners, and said gloating would make you feel like such a cockroach that you would rather not have friends at all if they owned houses?

You can go on and on with stuff like this. Most likely you could supply a couple of questions of your own. The point, I hope, is simple enough: The boom did not come free for anyone. It twisted values, created social castes along capricious lines, made some feel like fools and others like geniuses for the worst reasons.

To some degree, all booms have this peculiar impact on people. A hundred years ago the California gold rush distorted a whole generation of boomers who lived with the dream that a fortune could be made by turning over the right rock in the Sierra Nevada. Men abandoned their families and rarely returned. Most of them died broke and homeless.

The real estate boom, of course, was both more subtle and more widespread. No one escaped its small perversions. That tete-a-tete on my patio was repeated countless times by countless others.

But the pause of the boom carries the faint hope of a small miracle: that some day a young couple could gaze at a prospective 3 bdrms w/vu and see not the fulfillment of their life’s greatest ambition, not the thing that supersedes career or family, a ticket to social standing, but simply, and only, a nice place to live.