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Thursday Stitch N’ Bitch: Obama Speeches are worth pennies on the Square Foot. January 7, 2010

It is easy to remember this iconic You Tube video of the young Obama supporter who believed that Barry’s election to POTUS would mean that she would not have to worry about  paying her mortgage:

Little did she know that Obama’s historic election and the economic downturn which continued to ensue afterwards would lead to a revision of what Americans saw as “home”.  Personally, I have never been a homeowner. There were certainly times when I wanted to be one but living in expensive cities like New York City, Chicago and graduate school in Boston kept me financially out of the real estate market.  At times, I was obsessive about owning. I felt like a failure for not paying a monthly mortgage- at least a mortgage that belonged to me and not the landlord I was paying $2650 a month to for my Upper Westside apartment in Manhattan.  Being a home owner is the “American Dream” and I am not with it.

This unified narrative that “home ownership is the American way” played out in the form of envious tension within my friendships. I admit to a jealous wince  here and there whenever a friend announced “We just bought a new home”.  Granted they often lived in Hinky Dink, USA aka the “burbs” . Still, It was something to call their own while I was writing monthly checks to Ackbar Goldstein for my 500 square foot haven just blocks from Fairway and Urban Outfitters.  I pay dearly for my city living.  I shamelessly stored my Christmas items in boxes in plain sight with only a nice sari cloth thrown over them.  Those boxes doubled as seating for my guests when I dared to have a party with 14 people in my UWS box apartment.  New Yorkers understood me. Hell at 500 square feet, my place was a mansion to several of my friends who lived in apartments that equated to a walk in closet by suburban standards.  Afrocity was a lucky girl in NYC and now that I have moved up to a $1850 a month 920 square footer!!!

I am a lifetime renter. I accept it and I embrace my failure at achieving the American Dream.

Now that I have admitted to my loserdom, it might seem almost twisted that I smiled when I saw this bit of news in today’s Wall Street Journal:

U.S. Now a Renters’ Market

With Apartment-Vacancy Rate at 30-Year High, Landlords Cut Prices 3% in 2009

January 7, 2010


Apartment vacancies hit a 30-year high in the fourth quarter, and rents fell as landlords scrambled to retain existing tenants and attract new ones.

The vacancy rate ended the year at 8%, the highest level since Reis Inc., a New York research firm that tracks vacancies and rents in the top 79 U.S. markets, began its tally in 1980.

Rents fell 3% last year, according to Reis, led by declines in San Jose, Calif., Seattle, San Francisco and other cities that had brisk growth until the recession.

In New York City, the vacancy rate improved by 0.1 percentage point for the second straight quarter, but around 60% of rental buildings dropped their rents in the fourth quarter from the previous quarter. Effective rents — which include concessions such as one month of free rent — fell 5.6% in New York last year, the worst since Reis began tracking the data in 1990.

Landlords now must entice tenants to renew leases. “We’ll shampoo their carpets. We’ll paint accent walls. We’ll add Starbucks cards,” said Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate investment trust that owns 63,000 units. He said the first half of 2010 should be “pretty ugly,” but was optimistic the sector would pick up later in the year.

Few markets have been spared. During the fourth quarter, vacancies increased in 52 markets, while they improved in 17 and stayed flat in 10. Vacancies increased most sharply for the year in Tucson, Ariz.; Charlotte, N.C.; and Lexington, Ky.

Vacancies are tied to unemployment, because many would-be renters move in with family members or double up during a downturn. Apartments have been squeezed because younger workers, who are more likely to rent, have experienced the brunt of job losses during the downturn.

Afrocity does not want to come to the abrubt conclusion that she is actually living the American Dream now that she is a renter.  I should feel sad about this. Renting is a gamble at long odds. Often renters are at the mercy of landlords who take advantage of tenants.  In NYC my rent increased one year from $2100 a month to $2400.  Then there are times when renters come out on top. But when we do, it usually means that the American Dream is a nightmare for someone else.

My revenge seemed less kind as I watched an infomercial last week on a local Chicago TV station for auctions of foreclosed and “short sale” homes. It looks like we are all losers in the real estate game.

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14 Responses to “Thursday Stitch N’ Bitch: Obama Speeches are worth pennies on the Square Foot.”

  1. Nice post! I feel your pain, but have to say that being a renter does NOT make one a looser or failure. You know who the failures are? The ones who over leveraged themselves. They took out way too much in loans all for the purpose of buying a house big enough to hold their egos. Many of them are paying an obscene amount in interest. They don’t actually ‘own’ their houses–the banks do! Some of them will be paying for their mistakes well into their sunset years (that is, unless the government forces US to pay for their mistakes, LOL!).

    (Being an anti-Fed ranter, I do have to slip in here that the Fed’s manipulation of interest rates gave us such artificially low ones that people who perhaps should have rented longer piled into the market. The all-too-easy-to-get credit allowed them to borrow more than they otherwise would have. This was the main fuel for the insane housing price bubble.)

    The American Dream is really about owning PROPERTY. Depending on your life situation, this can come in either the form of a house (that fits into your budget) or savings. If you don’t need to own a house, consider your nest egg your ‘American Dream’. No matter how many loans you still have to pay off (you’re young), you can always sit down and make a long term plan for savings. Find a personal financial adviser you can trust and have a session with her/him. A few key tips can help you tremendously. Books and websites can help, too, but talking to someone face to face, they can tailor their advice to fit you. You CAN have the dream!

  2. I always rent but that’s because it’s easier since my job likes to move me around a lot. $2650 a month on an apartment is insane though, that is twice as much a lot of mortgages. Plus I rent a house right now outside Tokyo for less than that and that’s including utilities.

    I wouldn’t worry about owning a home, not now anyway, I will worry about it when I know I’m going to be in the same place for at least 15 years. The idea of owning a home was part of the American Dream when people rarely changed jobs so they spent their whole life in the same place at the same job, now that people change jobs and move around more owning a home isn’t the same as it used to be. I rent, it’s my home I just don’t own it and it doesn’t bother me in the least. Granted I’m not married so renting is normal, when I get married then I might start worrying about buying a home.

  3. McJenny50 Says:

    If I didn’t like my location right now, I’d sell the house and become a renter. With a growing family, it made sense to buy. Years later, 4 daughters are all on their own, husband died unexpectedly at 56. Now I am in a 4 bedroom with my two dogs. The house is 20-25 years old and things are beginning to go. It would be rather nice to call the landlord and have him/her fix what needs to be done as well as pay house insurance and property taxes.

  4. Rick Says:

    I don’t think it’s an American dream or loser situation. It’s a life style choice. Of course sometimes it’s not actually a choice it’s how and where you were raised and what is familiar to you.
    I’ve never been in NY and find the description of living there foreign and don’t believe I would like it.
    I have two houses, both modest 4 bedrooms. The second one I bought in this market at a bargain basement price in Maui and I have never paid a mortgage as high as the rents you’ve talked about. But then I probably live in what you would call hicksville.

  5. yttik Says:

    I was reading the classifieds this morning. I live in a rural area. We have 84 homes for rent, beautiful 4 bedrooms with water and mountain views, all for less then a thousand a month. The problem is the same classifieds only have 4 help wanted ads listed. It’s definitely a renters market. If anybody can figure out how to make a living around here, they could rent themselves a palace for very cheap.

  6. liontooth Says:

    Afrocity, you rock! There is no way you are in loserdom.

    BTW does Sonic Ninja Kitty have a British accent like that Gecko on the Geiko commercials?

    • afrocity Says:

      I am not sure of Sonic’s background in terms of nationality.

      • I am from the faraway land of O-hi-o and the exotic city of Cincinnati. LOL! It’s really not as dull as it sounds–after all, this is where Jerry Springer was spawned. (I do apologize on behalf of my lovely hometown for allowing him to escape!!)

  7. Aussie Says:

    We did not own our home until at least 10 years after we got married. By that time we had 3 children. In lots of ways we regretted not making the move a few years earlier since my husband was in the Air Force (Australian) and we were moved around. Owning a home in that situation would have meant rent was coming in the form of income. Ah well, such is life.

    After we purchased our first home it meant that we had to become a double income family. There was just no way that we could have afforded to pay the mortgage and for me to remain a stay at home mother. The interest rates when we made the purchase became crippling – up to and over 17% p.a. for the mortgage. However, within a few short years we invested in a second house as a rental property. This had its benefits.

    Then my husband was moved to Sydney…. mayhem… we started again…. renting at first… then buying a home… and finally selling our home. We retained the rental property for a few more years then sold it…. and then purchased another property.

    Then my husband took a job that meant another shift… this time to Canberra again…. yuk. We managed to purchase a larger house, and then we sold our house. We retain a rental property.

    It is better to wait until you no longer have the student loans and then if you have the savings for a decent down-payment make the move to buy your own home…. otherwise just forget about that American dream….

  8. gweema Says:

    I mention Peggy Joseph often in my comments around the net, because she really exposed what so many Obama voters thought. It would be great if one of the national news agencies would track her down and see how she’s doing a year after he took office.

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