In July of 2005, my husband and I purchased our first home. The idea to purchase a home came to us four months earlier when we became pregnant with our daughter and were living in a one-bedroom apartment at the time. I wanted to move before the baby arrived because our apartment was small, and I thought we would need more space.
Although it wasn’t necessary to purchase a house (after all, we could have rented a two-bedroom apartment for about $1300/month), we saw the home prices around us rising and rising, year after year, and we felt as though we would never be able to afford a home if we didn’t get into the market at that moment. Well, obviously, we were wrong. Hindsight is 20-20, right?
Before we began looking for a home, my husband and I sat down and crunched the numbers. We concluded that we would be able to afford a home that cost about $250,000. We began going to open houses and were incredibly disappointed. The homes we could afford were in terrible shape and needed tons of work, and the ones we liked were WAY out of our price range.
It seemed a little strange and unfair to us that two college-educated working adults could not afford a decent home in a blue-collar town. My husband had his doubts about purchasing a home at that time. He didn’t think the home prices accurately represented the home values. Instead of listening to his concerns, I came up with an idea that I thought was brilliant.
I proposed that we purchase a two-family house with my brother and sister-in-law who were also living in an apartment in the area. We would split the mortgage, taxes, and other home-owner costs. We would share the responsibilities of mowing the lawn, shoveling the snow, and taking out the garbage. My brother and sister-in-law liked my idea, and my husband came around, too, so we began looking at homes together.
We found the perfect home – two identical three bedroom apartments with a finished basement and a small backyard for both families to share. This would be our “starter home” – the place where we would start our family. Eventually, we would move into our “dream home” where we would truly raise our children and spend most of our lives.
We paid $540,000 for the home, which meant that my husband and I were responsible for half of that cost. It was still more than we wanted to spend on our monthly mortgage payment, but we knew we could afford it.
We planned to live in this home for five years, then sell it and make a HUGE profit. My husband and I would take our share and roll it over into the aforementioned dream home. I had it all planned, but things did not end up quite as I had imagined.
We purchased our home about a year before the collapse of the U.S. Housing Bubble. As a result, our home is now worth anywhere between $100,000 – $150,000 less than what we paid. We can’t sell our house because we are not willing or able to handle the economic loss at this time. Even if we were, banks are giving loans more cautiously, and the unemployment rate is high, therefore there are fewer people able to purchase homes. We are stuck in this “starter home” for longer than we had imagined.
The situation wouldn’t be so bad if the public schools in my town were great. My daughter will begin Kindergarten (which starts at age 5 in the U.S.) this September, and the public schools are not great. As a matter of fact, they’re not even good. I didn’t put much thought into the schools in my town because, as I mentioned before, I didn’t think I would be in the house long enough to have to worry about it. Sometimes things don’t work out quite as planned. So my daughter will very likely be attending Kindergarten in a Catholic school not too far from where we live. And, I think it will be a good fit for her.
Here’s the good news. We haven’t outgrown our house and we probably won’t in the near future. We also didn’t get one of those predatory interest-only loans that we can no longer afford, so making our monthly payments is not causing us a lot of undo stress. Other people have suffered far worse in this housing/economic crisis – short sales, foreclosures, and in some cases, homelessness.
My current living situation is not that bad, and at times, it even has its perks. My children live with their cousins who are ages 4 and 6. They see each other every day, so I never feel as though I need to make a playdate for my children. Also, my husband and I rarely worry about getting a babysitter. My brother and sister-in-law often watch our children for us, and we watch our niece and nephew in return. Another positive thing about our house is that we live less than a mile away from my parents, who are not in the best health and often need my help.
I’m happy to be able to see them as often as I do. Our neighborhood is also very diverse. I love that my children are exposed to many different races and cultures on a daily basis. That’s always been very important to me.
Finally, I own a home. It may not be the house of my dreams, and I may owe more money on it than it’s worth, but it’s mine and I’m lucky to have it.
Although the situation is not ideal, I have everything I need and more. Whenever I feel stuck in my house because I can’t imagine a time when I will have the home of my dreams, I remind myself that my house is not my home. My family is my home. It really doesn’t matter where we live, as long as we are together.
Were you affected by the housing and/or economic crisis over the past five years? If so, how did you get through it?
This is an original post for World Moms Blog by Kally Mocho of New Jersey, USA.
Photo credit to Bill Ward http://www.flickr.com/photos/billward/3377880287/sizes/m/in/photostream/. This photo has a creative commons attribute license.
Despite the economics I think that’s an awesome set-up. It’s like you’ve got all the benefits of extended family without actually having to live with them all the time!
I totally agree that where family is…is home. Although it would be wonderful to have that dream home too. 🙂
You’re right about the benefits of extended family being close by. However, I do have those days when I feel like there’s a little TOO much family in my life. My family is a bit enmeshed, and we could use some firmer boundaries from time to time, but most of the times it’s all good. My poor husband! He STILL chose to marry me knowing what he was getting into. He’s a good man.
Kally, I posted this week about how I was raised to believe that everything happens for a reason – sometimes we can’t see those reasons, but eventually they become clear.
I think some of the bonuses of your situation as you point out would outweigh the wants at the moment and you probably have more than some people can boast or afford and that’s ‘a home’
Good luck with eventually getting your dream home
I completely agree that the bonuses of my current situation outweigh my wants. That’s what I tell people when they ask me what it’s like to live with my brother and sister-in-law. I sometimes find myself wanting what my parents currently have, forgetting that it took them years of hard work and struggle to get to where they are today. Thanks for reading Fi, and thanks for sharing your thoughts.
I know many people who owe more on their home than it is worth. I also know others who have had to foreclose or short sale. We have had our share of hardships with the economy and housing issues. It certainly isn’t easy, but just like you said, your home is wherever your family is. That is what keeps me focused and grounded, too.
I think the pendulum swung very far to one side and we are now dealing with it swinging to the other. My hope is that when it balances out a bit more, we are all wiser for the wear. Until then, keep enjoying the nice set up that you have going on. Things will change and you will look back at all the great memories!!
I hope the real estate market balances out soon! 😉 My worry is that when it does, my house’s value will still be significantly less than what we paid. There’s nothing I can do about it now, so I can’t worry about that. Houses are not supposed to make people money. They’ve only recently become financial investments for people. I think the focus needs to return to making investments in our families. Thanks for reading!
I hope the real estate market comes back up in your favor, and thank you for sharing all of that personal financial information for our readers to understand your particular situation.
Thanks Veronica. I didn’t think I could make my point without sharing the figures.
It’s wonderful that you can see all the positives in your situation. You never know what life is going to throw at you, and plans don’t always work out as you imagine.
Here in Australia, we’d just started to get into property investing – and renovations. We studied courses and started out well, then the property market slumped and we’ve not really gotten any further since! It made us realise how narrow our focus was, and that we constantly need to be looking at different things, and be prepared for change.
I do think the housing market will bounce back, even if it takes some time, and when it does, we’ll be ready and more savvy then to take better advantage of it!
Until then, I think we all need to find other positives and not just hang around waiting!
I need to focus on the positives because it’s too easy to give attention the negatives. I’ve definitely learned from this experience and hope to never make this mistake again. Thanks for your comment!
Thank you for sharing your story, Kally. And you bring such a great perspective to it….your family is your home. Love that!
Thanks for reading Tara, and thanks for your comment!
Sorry to hear about how you’ve been affected by the housing bubble. We also bought a house in 2005 but Texas has not really been affected by this particular crisis. Housing prices have either remained stable or dropped only slightly. We keep talking about upgrading to a new house while the interest rates are so low but are comfortable for now. However, when (if) we have another kid it will be a little crowded. I think the U.S. is going to get some serious inflation soon so hopefully we don’t wait too long.
Thanks for sharing Kally. We are still renting and have started looking at houses, but the housing bubble hasn’t quite popped in Seattle – it still is very much like New York and San Francisco. Prices are coming down about 1% per month, so I’m hoping that by the end of the year, we’ll find something that fits our needs and is in our price range in the city.
As for your living arrangements, your situation sounds sounds great! Up until I was about 6 years old, my family lived in condominum development. My aunt and two cousins lived in the top floor apartment of our condo, we lived on the second floor, and my maternal grandmother, lived in the basement unit which opened up onto a patio. Another uncle and aunt lived two units over with another one of my cousins. I have dear memories growing up with those three cousins, aunts, an uncle and my grandmother. As they say, it takes a village to raise children, and that’s the way it was for my family back then. I think it was pretty cool 🙂