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Every Friday morning my real estate team-Bea Meriwether, real estate agent and Earnest S. Crowe, mortgage guy-meets for coffee at the Deli Delight in what's left of downtown Mirage Mills, the Chernobyl of American real estate and the epicenter of the foreclosure crisis.

House Poor: What’s the Matter with Kids Today?

House Poor

What’s the Matter with Kids Today?

By Homer Guthrie

Expert Homeowner

Every Friday morning my real estate team-Bea Meriwether, real estate agent and Earnest S. Crowe, mortgage guy-meets for coffee at the Deli Delight in what’s left of downtown Mirage Mills, the Chernobyl of American real estate and the epicenter of the foreclosure crisis. The other morning Bea was not merry at all. She held a printout of a news story from her favorite site, Realty Reality. It was coffee-stained and crumpled, as if she had retrieved it from a wastebasket.

“Did you see this?” She seethed, waving it at us. “This survey says 24 percent of young people today never plan to buy a home. How could they RENT FOR THE REST OF THEIR LIVES?”

I glanced over the article. It was one of those surveys about Gen X or Y or whatever letter young people call themselves now. “Shoot, Bea” I said calmly. “When I was under 23, I had no clue about getting married, having kids, owning a home. But today I’m considered an expert homeowner.”

Earnest also tried to calm her down. “It’s just a survey cooked up by the rental industry. They ask the questions so that they get the answers they want. Next week some other survey will come out and say the exact opposite: there’s nothing wrong with kids today; they can’t wait to buy a house.”

She frowned. “I don’t think so. This is serious. The real estate industry dies without a constant influx of new buyers. Without first-time buyers, move-up buyers can’t sell and move up. The housing ladder breaks down and everything freezes,” Bea said.

I wondered what they call move-up buyers when they can’t move up. Stuck up?

“The sad thing is, I believe the survey. I think we may be losing the next generation,” Bea continued. “I can’t remember the last time a young couple with stars in their eyes walked into the agency.”

“Come to think of it, I haven’t pre-approved anyone under 30 in six months and it’s been almost as long since I had a first-timer,” said Earnest.

Bea slumped back in her chair and sighed. “I’ll tell you one thing. If my daughter ever told me that she never wants to buy a home, it would break my heart.”

Knowing Bea’s only child, Millie Meriwether, I secretly agreed that she had good reason to worry. The punk rock princess of MM High dropped out of school five years ago for a boyfriend and a burger job. Now Millie, with purple hair and a pin cushion-full of piercings, rang up customers at Willie’s Hardware in Mirage Mills Mall. Not much of a homeownership prospect any time soon.

When my team gathered the following Friday, Bea had some news. “Earnest, you were wrong.”

“I am often wrong,” said Earnest with mock humility.

“I know for a fact that kids today don’t always move back home to avoid homeownership. They do it to save for a down payment so that they can BECOME homeowners.”

“So just how do you know that?” I asked.

She smiled. “Millie is moving back in with us so that she can save for a down payment. They want to buy a house. They’re moving in this weekend.”

“They?”

“Well, Melvin too.” Melvin was Millie’s boyfriend, a fellow punker who Millie supported as he pursued a musical career with a rock band. “I’m proud of them both,” she said defiantly.

Two months passed before the topic of youthful homeownership returned to our Friday morning get-togethers.

“Earnest, I need your help,” Bea said . “The kids are driving us crazy. We can’t wait two years for them to save enough for a down payment, so I’ve offered to help them out. But they can’t get a mortgage.”

“I’m not surprised,” said Earnest. “They need steady jobs, a better income-to-debt ratio, and underwriters don’t look kindly on parents paying down payments. These days, borrowers need to be self-sufficient.”

Earnest did his best. He called in every chit he could think of and restructured the loan application several different ways, but the go-go days of mortgage lending are long over and no bank would touch Millie and Melvin.

So Bea and her husband Morley did the only thing they could think of. They told Millie and Melvin that the house was too much for them and the time had come to downsize. Over the young couples’ protests, they sold at a lot less than they would have received ten years ago and moved into a condo in the city.

The kids found themselves on their own again but they found another way to save for a down payment. As I was walking the dog one evening, I noticed Millie’s Scion parked a couple of blocks away from my house, in front of a modest ranch that had been vacant more than a year but had no “bank-owned” for sale sign.

I saw Millie sneak out the back door and head for her car. She stopped when she saw me and said sheepishly, “Hi, Mr. Guthrie, I guess we’re neighbors. Kinda.”

“I didn’t know this house is for rent,” I said.

“Oh, it isn’t. You see, we’d like to buy it someday. Since it was just sitting empty we thought we would try it out to see if we liked it. Don’t worry. We’re taking good care of it. It was a real mess when we moved in but we’re fixing it up.”

“Well,” I said. “Good luck.”

So the American dream, a little battered and bruised, lives on in a new generation, I mused as I walked home. Maybe Millie and Melvin weren’t really much different than the homeless Europeans who squatted on Indian lands that seemed to be sitting empty and could use some fixing up.

About House Poor

Homer Guthrie is an expert homeowner who lives in Mirage Manor, a suburb known worldwide as the “Chernobyl of American Real Estate.” With his wife Felicity, who is also an expert homeowner, his real estate agent Bea Meriwether, and his mortgage broker Earnest S. Crowe, Homer tackles the tough issues in residential real estate in a weekly column called House Poor. Read House Poor every Monday on Real Estate Economy Watch.

To contact Homer or to inquire about posting House Poor columns on your site every week, write him directly at admin@reeconadvisors.com or post a comment.

Copyright 2012 by Reecon Advisors LLC. All Rights Reserved.

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