Friday, April 21, 2006

Property Values

I came across an interesting website, Zillow.com, that offers general property values for given land areas, probably based on real-estate agencies submitting houses-for-sale to their website to help generate business.

Let’s just say it was a real eye-opener when I typed in my zip code for Astoria, Queens and found the average price of a house is $715,000. (Most houses in the neighborhood are two-story rectangular row houses – often with separate apartment units on each floor – along with a basement and possibly a small backyard or garage area.)

The site also allows you to check out price variations in the past 10 years. In 1996, the average price for a house in this neighborhood was a little over $100,000. What happened in the interim? Manhattan apartment values went completely insane – you have to be rich or living like an idiot to make it there now. (Being both helps.) As a result, all those college-educated white folk with money, generally fresh out of college, looked for other places white folk could live in reasonable comfort – and Astoria is one of those last few places in the outer boroughs of New York City. Thus, from about 2000 onwards, rents and property values have sky-rocketed in the neighborhood.

I’m not sure what’s going on here. Who can afford to buy a house for $715K? Certainly not the working-class people who have lived there for decades. The first apartment I moved into in Astoria, back in 1997, had recently been bought by a Greek guy named Akis, a mechanic, who moved him and his family (wife and three kids) into the ground floor apartment in the back, rented the front apartment to me, and had two renters in separate upstairs one-bedroom apartments.

(He left the basement open for his own use, although his two teenage girls often got noisy down there, causing me to put some Suicide or Pere Ubu on the stereo and put my speakers face down on the floor. I eventually left the place because of the constant noise, whether it was the girls blasting shitty dance music, or one of their teenage Brandos out front blasting hiphop as his car idled in front of the house, or passionately throwing a garbage can down the alley next to the house as part of some mating ritual.)

But Akis had saved up just enough to put money down on what was then a $100K house, of which he could probably make enough simply by renting out three units to cover his monthly mortgage payments. It was a smart move on his part. Now? He’s sitting on a house that would sell for $700K. Does this make him lucky? You tell me. He could sell the house, but in doing so, where does he move? If he tries to stay in the neighborhood, he gets gouged. If he tries to step up to the suburbs with his new-found wealth, he’ll get hit with a similarly high mortgage, on top of insane property taxes and such – at the end of the day, he’s still a mechanic and making that sort of money. If he got the urge for a more rural way of life, he could do this, although far, far away from New York City.

You’ll find this quandary in a lot of places in America. About the only people who make out, aside from evil real-estate bastards who foster these kind of impossible living situations, are the beneficiaries (i.e., kids) of homeowners who are not long for this world. All over Astoria, you will find old working-class Greek men and women living in these $700K houses – houses they most likely paid about $30K for back in the 50s and 60s. They raised their families there, the kids moved out, often to the 'burbs of Long Island, and now these old folks usually live on the first floor of these houses, renting out the second story and basement apartments.

When they pass on, the kids will win the lottery, assuming there’s no feuding going on and they receive the property in the will. My living situation now is inhabiting a basement studio with an aging landlady who lives on the first floor. (She also rents out the top floor apartment to another older woman.) She has two daughters, and it seems that they’re constantly feuding over something, who knows what. I can generally tell when they’re not feuding by the clip-clop thuds of her grandchildren running rampant on the floor of her apartment.

She had a bad health scare about three years ago, some type of stomach problem that required major surgery, and any time she’s not up there (which she usually is 24/7) for a few days at a stretch, I get worried, even if she’s only visiting a relative. My rent is about $300 less per month than the market value in the neighborhood, which is absolutely insane these days. I have a sweet deal, I know it, and I do my best to help her out since her health was hit hard by that operation. I keep her back patio and sidewalks clean, shovel snow in the winter, make sure her gas heater is running properly, do her bills for her (she can't read or write English and trusts me to pay these for her with money orders ... which I do without fail), keep my apartment spotless, etc. Not life-saving stuff, but enough to let her know I appreciate the cheap rent and help out as a result.

When she passes on, or if she gets too ill to live alone, I fully expect her daughters to sell the house. They’d be nuts not to – as noted earlier, in Astoria this is now like winning the lottery. And when that happens, you can assume I’m gone, or will be offered an extortionate rent. Because whoever buys the house will have to rent out the whole thing at market value or greater to keep pace with mortgage payments and property taxes. As for me living in the same neighborhood, when I talk to people living there, I get the vibe that their sweet old landladies are gouging them at market value or greater – thus ensuring a revolving door on each apartment as people get tired of spending $900 for a studio apartment in what’s still a gritty working-class neighborhood. While many of their neighbors, who have lived there for years, are paying $400 a month for the same type of space.

I’d either have to go back to ghetto living a la the Bronx, which wasn’t all that bad in my 20s but doesn’t much appeal to me now, or get the hell out of New York. Or do what I’ve been carping against for a very long time – find some corporate job that pays near or above six figures and bury myself in a way of life I want no part of.

That’s the problem I’m having the world in general: the recognition that we’re all being forced into ways of life that focus mainly on the making of money. I’ve noticed this throughout my entire life. Then again, when you’re a kid, even when you’re in college or directly out of it, money isn’t (or at least shouldn’t) be a major concern. But I can clearly see that my Dad worked a basic factory job and managed to have a house with a yard, and the ability to support a family of six (four kids, wife and a mother) while doing this. As little as 10 years ago, a mechanic like Akis could save up, buy a house in Queens and make a reasonable go of it. (If I had my thinking cap on, I would have bit the corporate bullet for a few years, bought a house in Astoria in 1995, and sold the damn thing now for seven times what I paid for it – then again, I suspect very few people saw this real-estate boom coming.)

If just feels like this obsession with money has made us all less human. I don’t mean that in an evil sense. I mean in the sense of not having the time, mind frame or references to have a simple appreciation of life. I always get a kick out of corporate heads who make a big show of how well they understand life, that they have everything. Without fail, these guys (and sometimes women) are working all the time. One of them told me, “Bill, the secret to life is to realize that it’s all one thing: work, play, family. Your life is one thing, not separate compartments that you have to make time for.”

But he’s not so much wrong as someone I recognized was addicted to work and his resultant wealth. I liked the guy in general, he had a good attitude I respected. But I could see that his family was a distant second to work, and the only way to compensate was to throw big to-do’s, reunions and such at Kennedy-family style compounds, when it was clear to me his wife was alone most of the time and running on automatic pilot, his kids were distant to hostile towards him, and it wouldn’t occur to him that this set-up was in any way wrong. It’s a pretty rare instance in the corporate world where I meet “successful” people who actually spend any real time with their family. They either don’t and pretend they do, or they don’t and regret it. But money goes a long way as a substitute for real happiness -- not an insult so much as recognition of a simple truth.

Sorry if I sound like a hippie, man. You know how much I hate those folks. I think they essentially had the right idea, and most of them were the children of affluent families who wanted to reject those values, or expose the false aspects of those values, as noted in the previous paragraph. (Never mind that many of them later embraced those values in ways that made their gaudy parents look like Oklahoma dirt farmers.) All I want is a sane way of life, in which you don’t need a truckload of money just to function like a normal human being. The older I get, the less I see this happening anywhere in America. Surely not in New York!

2 comments:

George Fiala said...

To me this whole real estate thing is an anomaly, and a giant ponzi scheme. Unsustainable is a word that comes to mind.

Sooner or later there will probably be some big readjustment. The latest Harper's magazine talks about how that may happen in economic terms.

Me, I'm ok only in that I think I have already purchased and paid for enough books to last me in reading the rest of my life. All I need is electricity for the lights...

George Fiala

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