Riding the Real Estate Rollercoaster
Letter from Away — May 15, 2021
My mother bought the 1000 sq.ft. house I grew up in for $16,000 in 1959. In today’s dollars that was $130,000 for a three bedroom, two bathroom ranch, built on a slab and sitting on an acre of land 35 miles west of Boston.
In 2002 the land under the house was so valuable that Mom sold the property for $315,000 to someone who tore it down, put up a McMansion, and sold the result for almost a million dollars. Mom bought a share in a “retirement community” here in Maine that entitled her to live in a sweet little cottage only slightly smaller than the house in Massachusetts.
Five years later, the $210,000 cottage had not increased in value but it was time for Mom to become part of my household and she put it on the market. It took almost two years to find a place she felt good buying, and big enough for Mom and her furniture and me and my family. She said she was looking for a house that would take care of me when I reached her age. The 1700 sq.ft. house on Broadway cost $178,000; after we added a ramp and turned the “powder room” into a full bathroom with accessible shower, I guessed it was worth about $195,000. That was 2008
Ten years later the household was down to just me and my cat and I started to get rid of things and look for a smaller house. I figured that whatever I got for the four-bedroom house on Broadway should be enough to buy a two-bedroom ranch in a slightly quieter location. If I could reduce my property taxes by half, it was just possible I might be able to survive on my social security income of a little less than $900 a month.
I was a bit greedy, when I set the price in early 2019, and listed the house for about $40,000 more than it was worth. It took a year for me to get realistic and, when I re-listed it at the start of spring 2020, the price was $220,000. It sold in less than a week, for slightly less than I asked.
During the year or so between when I decided to move and the day my house was sold, I saw a number of downsizing dream houses. Most were ranches, quite a few were in good shape, and prices were low enough to allow me to consider improvements to suit my taste and lifestyle, such as a larger kitchen or space for my big, deep, clawfoot tub.
One 1000 sq.ft. ranch I’d seen, that sold for under $160,000, had wood floors throughout and a bath and a half, a lower tax bill, and was an easy walk to just about any part of Rockland. In addition to a full, dry basement housing a decent forced-hot-water heating system, there was a slightly funky garage and a nice yard where I could imagine planting fruit trees for privacy.
By the time I accepted an offer for my much larger house, a place like that ranch might have sold for as much as $185,000. But in the course of the couple of months from that at the end of June to the end of August, 2020, when I actually had the money in my hot little hands, property prices in our corner of the world shot up by 15–25 percent. Two years after I walked through it, the little ranch in Rockland has an estimated value of $220,000 or more.
Last week I looked a a house in Thomaston. It’s a bit smaller than the ranch in Rockland, and the Main Street you can walk to isn’t quite as busy, but I like the neighborhood and have quite a few friends in town. The house I looked at has floors that are not wood but plastic, colored to look like wood. There is only one bathroom, no basement, no garage. It entered the market at $255,000.
This is exhausting.
Just before the pandemic hit, in February 2020, the median house price in Knox County was $225,000. A year later it was $276,500. For those in other parts of the world, around here that will buy you four bedrooms, five acres, a two-bay garage, and a standing seam steel roof. If you’re lucky, it won’t have granite countertops. Twice as many houses were sold this year than 10 years prior and the updates — mostly cosmetic — are driving prices further.
Being a bit of a mystic, I drew some Tarot cards a few days ago. My deck is called the Alchemical Tarot and, as usual, the cards told me to trust my instincts. The problem is, I have no internalized experience to meet this circumstance. The speculative behavior of this market doesn’t seem rational to me and my gut wants to walk away from the monetization of shelter.
We all need to catch our collective breath. Where people live shouldn’t be a commodity, to be traded for purely financial gain. Houses shouldn’t be hoarded like toilet paper and gasoline which probably shouldn’t be hoarded, either.
See how worked up it gets me? It’s the definition of unsettling, this having no place to land.
I’m lucky to have a friend with a couple of rooms to rent. If all you’re interested in is money, mess around with your favorite version of GenCoin. Please leave the houses to the people who will serve you your supper tonight and play the music you long to dance to.
Shlomit Auciello is a writer, photographer, and human ecologist who has lived in Midcoast Maine since 1988. Letter From Away has appeared online and in print, on and off since 1992, and is published here on a weekly basis.
