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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 408.840.7420 DRE #01352339 Sean Dinsmore, Realtor Intero Real Estate Services 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 48 0 1 25 114 8 4 $677K $681K 44 19