Disposable Housing

Thanks to the tanking of the real estate market, more clients than ever did something extraordinary in the years of the housing decline: they quit moving. Specifically, they quit moving up. In the years before the sub-prime fiasco, I would regularly encounter clients who would completely forsake their current home in an effort to find something, anything, that was shiny, new and better suited to their familial needs. The idea of staying put in a community and neighborhood where they had invested many years of their lives was laughable.

In fact, when I listened to one client complain about having to drive the kids much farther to school and sports activities in the newer home, I was astonished that the idea hadn’t crossed their minds to stay put and remodel. “Just do the math“, I offered.  If you remodel your current home, you can use a low-interest home equity line of credit to finance it, and you’ll get exactly what you want in a house that’s already in the school district and community you love. Your monthly payment will be lower than if you buy new, and you’ll get a better quality product as a result. Will you consider adapting your current home instead of buying a McMansion?  I waited for their response …and waited …and the clients finally looked at each other and laughed. Startled back to reality by the sad look on my face, they said “Oh, isn’t that sweet? She was being serious!”

While these particular McMansion groupies were unfaltering in their desire for the shiny and new (and by shiny and new I mean obscene square footage with a crappy floor plan and miles of flat white paint but-oh-yeah-it-has-granite, many clients adapted their expectations and decided to stay put after the great decline. For some homeowners, it was the only feasible alternative once real estate agents delivered the news that their current home could take 18+ months to sell, and that the profit wouldn’t be enough to finance the jump in payment for the new home. Enter: remodeling.

I’m working on a few of those stay-put-for-now homes currently, so I’ll keep everyone updated on the progress of the remodeling and the relative happiness of the clients in their decisions.