It all comes down to what chicken you prefer.
This isn’t referencing KFC, Chick-Fil-A, El Pollo Loco, Raising Cane’s or Popeye’s.
It’s a choice between Chicken Little and The Little Red Hen.
At the risk of sounding like my grandmother, it doesn’t pay to keep running around like a chicken with its head cut off or doing the “woe is me” act in perpetuity.
Nowhere is that more true than how people deal with the dilemma that is the housing market in the Valley.
Most of us shake our heads in disbelief or else react as if the housing gods have gone crazy when we see a 3,200-square-foot home that sold new seven years ago for $595,000 sell for more than $1 million today.
That’s because many of us are relatively secure in our homes having gotten on the housing price escalator years ago. We’ve experienced stalls and occasional situations where the steps have run downward. But when the dust settles housing prices keep going up.
There are those of us who are caught in a serious squeeze due to life events and are for all practical purposes at the mercy of renting.
But there are those people out there who act as if they are part of the only generation to suffer crushing housing prices. If we want to be honest anyone alive today in California who is part of the age group that puts “golden” in our state’s nickname — as well as those a decade or so younger — have thought the same thing at one point in their lives.
Yet here we are. There are homeowners — or at least those in partnership with a mortgage lender — who aren’t pulling down anywhere near six figures in household income.
And to be honest there’s more than a few who never did — or haven’t — come near the median household income either in the past or where it hovers today around $70,000 yet they still own houses.
How did that happen? Did they win the lottery? Perhaps they made a killing in the stock market? Maybe they worked at a tech startup with stock compensation that has made them multi-millionaires 70 times over? Or could someone have left them a lot of money?
While there are instances out there where one or two of those reasons might be true as to why people are homeowners, the real answer can be found in a concept described in two words — “delayed gratification.”
Yes other things go into it — hard work, perseverance, resilience, and such. But at the root of it all is delayed gratification.
It is true you may make all the right moves and come up empty-handed in life but for the most part if you pick a goal, employ discipline, and settle in for the long haul you are going to get much of what you need and even want in life.
In recent weeks I’ve chatted with two different couples, both with children who are closing in on their 30s. Both couples want to buy a house but they are living paycheck to paycheck with no real savings. They have several things in common. They all work. The couples each have combined incomes of more than $100,000.
From there they differ somewhat. One couple has a household that could compete with Best Buy for the latest tech, gaming, entertainment devices, and such. The other rarely goes a day without eating out or eating in with the help of DoorDash, GrubHub, and similar operations.
There is crossover. The tech couple does use their devices such as Apple watches, iPhones, and iPad to oftentimes summon dinner, lunch, or both. The couple who gives UberEats stockholders hope do delve into techie items.
They clearly get what they want now which is why, unless they somehow come into a boatload of cash, they will still be renting when that home that sold for new in 2016 for $595,000 sells for $1.8 million in 2033.
Twenty-five years ago when home prices were going crazy a real estate agent I know stood in front of a 900-square-foot home built in the 1950s that had just sold for $92,000. When she was asked whether she thought the homes on the block would ever sell for $100,000 her reply was “not in our lifetime.” A similar home on the street sold last year for $328,000.
Back in 1997 when that conversation took place the median value of a home closing escrow in one San Joaquin County city was $145,000. Today’s its surpassed $500,000.
Despite $145,000 seeming cheap today it was seen as outrageous for most people living and working in that city who were in the housing market.
There are two stories that appeared in a local newspaper that were shared by local homebuyers back then that bear repeating.
The first was of a 22-year-old couple. The wife had gotten pregnant in high school by her boyfriend who she ended up marrying. They were determined not to “live” the scenario of teen-age pregnancies and its aftermath. Both finished school. Both worked. Sometimes one or both had multiple jobs. They sat down with a mortgage agent — a no cost consultation — to see what they needed to become homeowners. They were told they’d qualify for a FHA loan requiring 3.5 percent down. They then started finding ways to save.
Working what were basically minimum-wage jobs they saved $3,400 over three years that allowed them to buy an $80,000 home. It was essentially the equivalent of buying a $320,000 home today. There are homes in that price range. You can’t however get a whole lot of wants in that price range but you can certainly cover needs.
The other story involves a Lathrop family. The husband worked year-round with an area farming operation. He made better that minimum pay but not a whole lot more. The wife was a seasonal cannery worker who was on the job enough to bridge when she didn’t work with unemployment benefits.
They had three children. And they were determined to buy a home of their own. The wife found every possible way to save such as outfitting her family in second hand clothes as well as buying beans, rice, and anything else she could by the 40- to 50-pound sack.
They qualified for an FHA loan and ended up being able to save enough to buy a home. When they did the interview it was 1997. They had bought their first home six years earlier in Lathrop for $45,000. They had just sold that home and bought a nicer larger home for $98,000.
If there were ever anyone who could have flocked to the Chicken Little crowd when it comes to “insurmountable” housing prices it was those two couples.
But instead the followed The Little Red Hen’s example.
This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinion of The Ceres Courier or 209 Multimedia Corporation.