Love the One You’re With : Many wanna-be home sellers are finding the move up to a better house is tough in today’s buyer’s market. So instead of selling, they’re improving their homes and learning to be happy where they are.
Like anyone on the verge of moving to a larger, nicer home, Deborah Teltscher and Bill Coleman were excited. After a long search, the couple had found a house with twice the space of their little Venice bungalow, in a nicer neighborhood with better schools for their two young children.
Eagerly, they made an offer and went into escrow, expecting to say goodby to their tiny two-bedroom, one-bath starter home.
“(The new house) had twice the square footage of our house, and we knew we could turn it into something we would really like,” Teltscher said.
But as many wanna-be home sellers have found in this hammered housing market, the move up to a bigger, better house is proving to be very difficult, very costly, or both.
Teltscher says she and her husband, both architects, just couldn’t get the price they expected for their house. So, feeling the sting of disappointment, they were forced to back out of the deal.
But all wasn’t lost. The couple decided to finally do whatever they could to make their little house a more suitable home. Their solution: making their kitchen more user-friendly by adding more cabinets, a hood over the stove, a microwave oven and a butcher-block counter.
“It’s been great,” says Teltscher, who is enjoying the new kitchen. “It’s sort of like buying a new dress when you’re feeling depressed.”
Throughout Southern California, a growing number of homeowners are searching for ways to beat the real estate blues as they watch their home values stagnate or slump, leaving them with lower-than-expected equity and an inability to realize their move-up dreams.
“I hear more talk about real estate than a lot of other things,” says Irene Goldenberg, a family psychologist with UCLA’s Neuropsychiatric Institute, who says the real estate depression is a widespread phenomenon that is affecting people at all income levels.
“Real estate issues are coming up everywhere, in the divorces, in the remarriages when people have children and have to get bigger houses. People are feeling cheated and confused; they expect certain things to be always so.”
While homeowners throughout the United States share concern about diminished appreciation of real estate, Southern Californians face a set of unique circumstances that magnify the problem.
Especially hard-hit are many of those who helped make national headlines during the late 1980s by paying full price and more for a house in an effort to beat out other hungry buyers.
“If you bought your home 10 years ago, you’re not nearly as sensitive to the matter as people who bought within the last five years,” said Dowell Myers, an associate professor at the Lusk Center for Real Estate Development.
“Their mortgage payments are looking a lot more expensive today than when they bought a few years ago, because they were banking on high appreciation (as a long-term return) on high monthly payments. Without appreciation, those payments are like expensive rent.”
Also feeling the pinch are those who, fearful of being completely priced out of the spiraling Southland market, made their first home purchase during that inflationary period.
Many accepted whatever house they could afford as the now-legendary real estate appreciation made quick move-ups appear par for the course. Settling for a less-desirable home that was perhaps too small or in a neighborhood they didn’t particularly like was considered a temporary, economically sound arrangement.
And further, today’s real estate stagnation is “radically controlling” career choices of many homeowners and is keeping some from accepting out-of-area jobs, said Scott Fraser, a psychologist and chief executive officer of the nonprofit Neuropsychiatric Foundation in Los Angeles.
“Let’s say I have a job offer in Cincinnati that’s a big jump in terms of pay,” Fraser said. “I may have to walk away from five or 10 years of aggregate home improvements. So what do I do? Do I go to Cincinnati and try to find some way to hold this house? Or do I stay here and give up this career opportunity? It’s pretty depressing for people when they think, ‘I can’t afford to move and get a better job because of a house.’ ”
And because many mortgage payments are so high, finding a renter willing to cover today’s large mortgage payments can be quite a task, if not impossible. The result, he said: “People feel shackled, which can be very psychologically debilitating.”
“Keep in mind the reason you wanted a house is that it meant you made it and were in charge of your destiny economically,” he said. “But now what you have is a giant ball and chain . . . and that has to have a sobering effect on an individual.”
Andrei Simic, a USC urban anthropologist, says the emphasis Americans put on home ownership is especially vivid in Southern California.
“Your house and neighborhood in some sense tells who you are,” Simic says. “It’s a statement, a form of communication.”
So what’s a Southern California homeowner to do?
Goldenberg said the key to survival is realizing there are indeed choices.
“This is something everyone got swept into,” she said. “We just have to be more creative.”
Goldenberg says many of her clients forced to stay put are enrolling their children in magnet schools as a compromise to moving to a better school district. Others faced with low or no equity are for the first time seeking loans from in-laws or other relatives.
“Those who’ve grown up in the ‘50s and ‘60s always had a sense that if you worked hard and did what you were supposed to to get ahead, you’d be better off than your parents,” Goldenberg said. “But that whole philosophy is gone.”
Fraser agrees and said that the first order of business is realizing that the “notion of owning a home as a keystone for economic stability and in large part a measure of one’s personal worth as an economic human being is now no longer as attainable.”
He said many people who have money, but not enough for a move-up home, are opting instead for other trappings of wealth.
For instance, he says, it’s not uncommon today to see modest homes in middle-class or even working-class neighborhoods with several fancy cars sitting in the driveway.
“People have made a decision that they can’t or don’t want to spend the money on a finer house and are instead purchasing a greater number of accouterments,” Fraser said. “They’re buying high-status cars, taking longer or more exotic vacations, things that show they’re still economically viable and not looking over their shoulder for the next meal.”
Myers, of the Lusk Center, said a simpler way of pulling out of a real estate driven funk is to reconsider your home’s positive attributes.
“Maybe you bought your house with the intention of wanting to live in it only a couple of years,” he said. “But it may be worth reassessing whether that initial assumption was a good idea. If your house has problems, at least you know what those problems are. Problems will crop up in any house you buy and at least with the one you have now, there’s less risk and more certainty.”
Moreover, he says, there are a lot of things you can do to turn your house into a home.
His favorite suggestion: “plant a garden.”
“The great thing about landscaping over any other improvement is there’s a real psychological advantage unlike anything else you can buy or do,” Myers said. “Landscaping improves over time, while everything else you do runs down. New paint deteriorates, a new car deteriorates, but greenery and flowers will get better and better each year, and that’s a good investment psychologically.”
David Stewart, USC consumer psychologist, said that personalizing your home is a key ingredient to being happy in it.
“As people make a home really theirs, then it ceases to be just an investment from which one can be so easily detached,” he says. “To the extent that you personalize a home, you become more satisfied and are less likely to move.”
Erin Quinn, an assistant professor of family medicine at USC, found that true enough.
Her house in the northeast Los Angeles neighborhood of Montecito Heights was too small for her two children, her new husband and stepdaughter. But the depressed market kept her also from selling her house and buying something bigger.
“We started looking around for bigger houses and a three-bedroom (home) cost too much more,” Quinn said.
So she stayed put and found the antidote to her real estate blues in a 900-square-foot addition to her two-bedroom, two-bath home.
“I realize I really love this neighborhood,” she said. “Now I’ll have three bedrooms, a living room and family room and I can stay where I like.”
Others are opting for simple, yet effective improvements, such as trading aluminum windows for wood-case frames, replacing sliding glass doors with French doors, modifying a roof line or just adding a coat or two of fresh paint.
Stewart says the real estate slowdown has actually restored some healthy normality into the market by prompting people to once again take a “more realistic view of their home.”
“We’re starting to go back to the time when you bought a home not for its potential money-making abilities, but rather as a nesting spot, to raise a family and settle into,” he says. “Houses are still a good investment, and the only one you can live in, but you can’t depend on that for the kids’ tuition, your retirement and your life savings.”
And the silver lining to this change, he said, is that people can again do what they wish to their homes without worrying about offending a potential buyer.
“If you like fuchsia carpets, you don’t have to worry what they will do to the resale value of your home,” he quipped. “You put fuchsia carpets in and you enjoy them.”
“There’s always something you can do,” said Deborah Teltscher. “Everybody probably has a list in the back of their mind of things they’d like to do but they put it off because they plan on moving. But if you’re going to stay a few years, it’s probably worth writing out the list and trying to accomplish some of it. We wonder why we didn’t do it earlier.”
