By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
Stanton. Beautiful, beautiful Stanton. Home of Venus' live nude ladies, "theaters" that feature bruised, hollow-eyed girls waving their clean-plucked naughty bits in the air, and a plethora of pawn shops where I like to do my Christmas shopping.
Stanton is the place the rest of us here in Orange County make fun of when we're tired of mocking Fontana.
Stanton—let's face it—is a nasty, stinking hole, and therefore the perfect place for your first-time home-buying needs.
* * *
A few months ago we received a letter from a frustrated reader. It read, in part, "Would someone please do a story on the housing crisis in Orange County!
"I would very much like to hear about how people in their late 20s-40s are dealing with the situation. I am college-educated, 35 years old, with a good job, and married with a combined income of about $100K, and we can't afford a home and refuse to pay $485,000 plus association fees for a two-bedroom apartment (condo). This basically pertains to anyone who is not poor enough and not rich enough to enter the housing market . . . what used to be middle class has been squeezed out."
Being "poor enough" won't help you either, of course, until Jimmy Carter comes to town. But that's an affordable housing crisis story for another day.
My editor, naturally, thought this young couple's letter was a grand idea for an article. "How could someone like you," he asked, "who earns the county's median household income, but who owns no actual money as such, buy a house?" He wanted real, creative solutions, he said, not snotty commentary.
I tried to argue: this market is going to crash, I said, probably no later than 2007 (when the first wave of interest-only loans' balloon payments come due), and all those people who have interest-only loans—one-third of the loans that were opened last year were interest-only—are going to suck it, which is the scientific term. You know when the last time was that interest-only loans were as popular as they've been in the past two years? In the 1920s, so there's a little food for thought.
I continued, screechily: interest-only loans stop being interest-only after two to five years, and if the housing market hasn't appreciated even more in that period, you can't re-fi the balance and we'll have mass defaults and foreclosures. (If a median-income gal like me tries for a 30-year fixed, she's looking at house payments that are more than she earns—and that's if she has $120,000 for a down payment.) And how much more can the market appreciate? Houses that are going for $650,000 today (and they're not even particularly nice, really) sold for $190,000 just seven years ago. Eventually, you're going to run out of people who can afford to pay $1 million for a three-bedroom Costa Mesa ranch house, since I'm not sure how many Saudi sheiks are interested in cornering the Costa Mesa ranch house market.
But my editor wore me down—he always does—and I opened my mind and agreed to investigate. He reminded me how much I'd wanted a house when my landlord sold mine a year ago. And I started to think about the amount of cocktail chatter I expend on real estate, when all the talk used to be of sex. And I thought some more about this housing market, and what I might have to say. Really, I don't know how my editor does it.
How could someone like me buy a house/condo/cardboard box? Real solutions? Not snotty commentary? No problem.
And did he want a unicorn with that?
* * *
Perhaps you've read that Orange County's median home price (that means the price at which half the houses sell for less and half sell for more, in case you never finished high school) has risen to $618,000. Perhaps you also read that only 16 percent of us can afford a home in this market. Perhaps you also also read (since it was just a couple of paragraphs ago) that I earn the county's median household income. Even all on my lonesome, I'm in the right-dead-middle of the middle class. But I don't like to brag.
I put off the story as long as I could, because it was depressing me and I hate you, each and every one. But I finally pulled myself out of my pit and decided to keep my promise. I'd find a miserable fixer-upper in a miserable neighborhood. I'd get over my elitist disdain for condos and townhomes and just accept that there would be no gracious, grassy yard for my boy and his big, romping dog. I'd find a guy who could give me the most ridiculous, even predatory, negative-money-down loan in existence.
What's out there? A sampling from my travels:
A dark but good-sized home in an Anaheim neighborhood where every house was landscaped in weeds—definitely a fixer-upper, since the doors all seemed to sport Bondo—is offered for $550. (Thousand. From now on, just assume there's a thousand written after every figure, unless I specify that we're in the millions now.) It did, though, have a nice yard.