A Society
Divided
A
lmost everyone has felt the impact
of an economy that, even in
recovery, has been cruelly fickle,
rewarding those wealthy enough to pay cash
for a home but leaving even middle class
first-time buyers who have saved a sufficient
down payment and can qualify for a
mortgage to battle it out with their working
class neighbors for an ever-shorter supply of
good jobs and entry-level housing.
“We’ve evolved an economy which
basically
creates some
very high-
end jobs and a lot
of low-end jobs, but
not so much in the
middle,” explains
Chapman University
historian and writer
Joel Kotkin. Kotkin
worries that the state’s
middle- and working-
class may be the big
losers in what he expects to be an extended
affordability crisis.
“California today is much more class-
divided,” he says, noting that the “divide” is
greatest in coastal California, where a basic
home in a decent school district can easily
cost more than $1 million. “The middle
class, or what you might call ‘the effective
middle class’—people who actually go and
buy a house—is shrinking. My big worry
is that we are moving toward more of a
feudal situation where property owner-
ship becomes harder and harder to achieve
and people are just literally draining their
earnings into paying the mortgages of
much richer people. People paying $3,000
or $4,000 for a one-bedroom apartment
might as well just take their paycheck and
flush it down the toilet for all the good it’s
going to do them.
“When you have, in the case of L.A.,
almost 40 percent of households paying
close to 50 percent of their income on rent,
how do you ever save for anything, whether
it’s your kids’ school or a down payment?”
Kotkin asks. “The question is: Do people
make enough money to afford to buy a house,
and can they do it in an area where there are
decent schools and relatively close to work?
The schools issue, along with the compression
of incomes so that relatively large segments of
the population don’t make enough money to
buy in California; that really hurts.”
Fortunately, there are some trends that
favor a solution—if public policymakers,
REALTORS®, and all three generations can
take the necessary steps to lift the market
from the bottom up.
Immigrants are one group that may help
pick up the slack, says Myers. “The upward
mobility of immigrants is astounding,” says
Myers. “After 30 years in this country, as
many as 60 percent of immigrants are home-
owners. That’s an astounding rate of progress
and a force that is pushing the housing
market up from the bottom. It gives us some
hope for the future—that the Millennials and
the immigrants combined have a lot of fire-
power and will bolster the housing market.”
Appleton-Young says it’s only a matter of
time before Millennials start behaving more
like their parents. “They’re just starting down
the road later in life,” she says. “I do think
it’s all related to delayed adulthood, and that
once you get married and have a baby, you
become a different animal. You’ve got some-
thing to protect and something to educate.
And homeownership becomes a priority.”
Article and Stats Provided By:
Marta Dinsmore, Realtor
Intero Real Estate Services
DinsmoreThePowerOfTwo.com
408.840.7420
DRE #01352339
Sean Dinsmore, Realtor
Intero Real Estate Services
DinsmoreThePowerOfTwo.com
408.840.7327
DRE #01966405
February 1 thru March 30, 2015 April 1 thru May 31, 2015
Active Listings 55
Short Sale
2
Bank
0
Average List Price 1,054K
$902K
Average days on market
21
Closed Sales 71
Short Sales
4
Bank Owned Sales
0
$664K
Average List Price
Average Sales Price
$660K
Average Days on Market
45
GILROY • MORGAN HILL • SAN MARTIN
JULY/ AUGUST 2015
gmhtoday.com
48
0
1
25
114
8
4
$677K
$681K
44
19