Community Columns

Reluctantly cashing in on a California crisis

Events move in a variety of patterns. Most of the time we just amble along from one thing to the next, but sometimes it seems as though nothing is happening or, conversely, that change is occurring at a million miles an hour. I have been experiencing every one of these paces lately, and sometimes all of them at once.

After two years of getting my house in order — a slow, painstaking process — I experienced the flurry of putting my house on the market. I’ve been very fortunate to find an enthusiastic buyer — no one knows that better than I. But I’m spoiled, and was totally unready for the next installment.

Four days ago I flew to Merced, Calif., where I plan to move, hoping to find a house to buy. Merced is in the midst of a housing crisis, one of the worst in the country. This is what enables me to think of moving there. The town has suffered terribly from the mortgage crisis, and it has a lot of empty houses. It is estimated that apart from the houses now up for sale, banks are holding 1,200 more off the market (in a town of 22,000), waiting for prices to go up.

Right now, however, Merced’s real estate sector operates only on a cash basis. If you want to buy a house, forget about a mortgage — that’s passà — your house won’t cost you “much” by Twin Forks standards, but the entire transaction probably has to be completed within 30 days. One reason a mortgage is out of the question is that appraisals have not caught up with the new reality, so houses are appraised at a higher value than they can actually sell for, meaning banks can’t write mortgages on them.

As a child, I used to be fascinated with the original colorful label for Old Dutch cleanser — a woman in a Dutch cap holding a can of the cleanser and looking at herself in a mirror, infinitely (so it seemed) reflected in her mirror image, can and all, reflected again, and again, each time in a smaller version until she and the can are visible only in the imagination. For the banks that so eagerly sold mortgages to people who couldn’t pay them must now watch business circumvent the whole process. Nevertheless, the banks still own that housing stock, and one day, post bailouts, they will sell and partially recoup.

Meanwhile “investors” are in control. They buy properties at auction and “flip” them, doing a minimal cleanup and then putting the house up for sale again, cash only, to be spoken for within seven days. This is how it’s working for me right now, for it will be a minimum of five days before I find out if my offer is accepted and, of course, I’m not the only one waiting to hear. While I want this offer to work out in my favor, I do think hanging in limbo serves people like me right for trying to benefit from someone else’s personal disaster. The housing bargains in Merced are enmeshed in stories we’ll never know. But I have a hint in the case of the house I’m trying to buy because my daughter Susan saw it a month ago, before the investor did his cleanup; she walked into a living room with Christmas decorations, including a tree and children’s toys, still in place.

I can’t love the investors, but I love the banks even less. They are keeping homes off the market and letting them deteriorate. No one is taking care of them. A house is like a person, I think; it needs someone to be concerned about it. Maybe that is the real tragedy in Merced, that people became as disposable as the homes they lived in. It’s not only Merced’s tragedy, however, as we know. The business model isn’t a particularly good one for people, and it’s shown that it’s not always very good for the country either.

Update: Just as we were going to press, I found out that my bid was accepted by the investor. I don’t feel guilty, but I do feel very fortunate.

Ms. Amussen, of Greenport, is a freelance writer and a copy editor at Times/Review Newspapers. E-mail: [email protected].