Jumping on the Real Estate Merry-Go-Round

Google and Chase have just issued a report on house-hunting searches. http://news.morningstar.com/all/business-wire/BWIPREM20170714005166/chase-google-track-down-where-buyers-start-their-house-hunt.aspx

First, in the interest of full disclosure, one of the most searched-for styles of housing is “yurt.” All of those searches are me and maybe one hippie I met in 2004 in Davenport, Iowa (who recommended yurt living very highly). There’s no question that I will soon blow this pop stand, and a yurt seems like a good option most of the time.  My goal is to put my yurt on Inaccessible Island, and I’m having a little trouble figuring out how to get there.

The interest in buying a home is encouraging. It can be one of the best ways to plan for a good retirement. That new homebuyers today have access to the Internet may prevent some of the worst fiascoes I encountered on my first try.

My husband and I did not buy real estate our first time–we jumped on an awful, dizzying merry-go-round. We were living in our first Chicago apartment, located in the Rogers Park neighborhood. We were chafing at the high rent and were puzzled by urban facts of life like transit (which we love but did not yet know how to use) and lack of parking spaces. We saw our first mass eviction (due to condoization in a neighboring building) and felt heartbroken and overwhelmed. People were sleeping on and in their cars, children and belongings scattered around.

We decided to buy, and quickly found things like townhomes to be $100,000.00 in our area. At that time, $100,000.00 was unimaginable to us, and I also refused shared walls. There were many, many affordable, cute, detached home on the south side, but, absent the Internet, no one really was available, in 1994, to talk to two kids from Terre Haute about the south side of Chicago. Today, a quick Internet search would land multiple listings.

With open hearts, we started exploring Gary, Indiana each weekend. I had disembarked from a bus at the Gary Metro Center just a few years before and had been amazed at the community. Gary has long been maligned as crime-infested, and, sure enough, lots of people helped me off the bus and to the car with my bags. I can understand how many first-time visitors would take this as attempted theft, but I arrived at the funeral I was attending unharmed. (On my return, I set my purse down at a small community festival while waiting for my bus–only to have people go to great trouble to track me down and return it, so I can definitely see how people fear crime in Gary since this was clearly all an elaborate trick. So elaborate I still haven’t figured it out!)

In today’s age, we would have used the Internet to find homes or learn about the area. Back then, we called a realtor. The realtor reluctantly showed us one home in Gary, then drove us to several entirely unrealistic homes (condos in Schererville, McMansions in Crown Point) to tire us out while making pointed comments that most realtors will “only show you one or two homes and expect you to pick one” and urging us to buy an Amway membership from her to finance her twisted version of the American dream. By the time we got to a brick house in Merrillville, it seemed perfect. It was everything I never wanted: flat, ranch-style, and (undisclosed) owned by the realtor’s best friend. It had off-street parking though!

We were unhappy in Merrillville from the first day. The roof leaked, costing $5,000.00 within months of the purchase. The neighborhood was bland, isolated, and parochial. The neighbors saw us as unbelievably exotic because of the fancy foreign food we would carry in from the Taco Bell. The home was never off the market–we tried to sell for five years, finally moving and leaving it. We had to take $7,000.00 to the closing table to unload the house years later. We would have happily contributed $70,000.00 had we had it available.

I cannot imagine this scenario today. With the Internet, we might have found out steering violated the Fair Housing Act (I was not yet a lawyer.). We might have found out the home was not worth what we paid. We might have found out that there was more than one house the realtor could have shown us in Gary. We might have found out Merrillville was a hotbed of racist sentiment and lacked every single kind of urban amenity–not even a bus ran through it at that time (and sidewalks were eschewed–neighbors literally told us they would attract black people, a correlation that still puzzles us). When we moved, a neighbor asked us point-blank not to sell to black people, and surely Google would have taken us to a list of fair housing resources had it been available!

The study shows that affordability is a big concern expressed in the searches–people want to know how much yurt or house they can afford. We were told how much we could afford, and the contingency-based realtor and mortgage-broker made sure it worked. We did not have the Internet to check rates, find out what our credit ratings really were, or calculate affordability. It was a major coup that we limited our spending to about half what the realtor urged us to spend. The woman repeatedly tried to convince us that two kids with retail-level jobs could afford $150,000.00 (in 1994 dollars, so about $248,000 today)! I believe–I hope–people in our shoes today would get to the Suze Orman website or similar pages and get accurate advice. Absent accurate information, we relied on common sense–but it was a hard sell to the “professionals” “helping” us!

The ability to look up and compare interest rates online is mind-blowing to this oldster. I cannot imagine what would have happened had I compared interest rates, been able to refinance with a click, or use amortization calculators. Although mortgage fraud is still rampant, computer savvy people have a chance, at least, to do some stealthy comparison shopping.

Finally, it is interesting to note that many of the searches originate in relatively affordable parts of the country. Most come from the south; few from the northeast. Certainly, buying in an affordable area is a great financial choice. At heart, I want to live in the northeast (New York City), but living in the rust belt has afforded me flexibility I could not have had in NYC. Living in the midwest has perhaps made me angry and bitter, but I am certainly more financially stable.

The study is an interesting window into the home-buying process. Perhaps the web will, eventually, level the playing field for prospective homeowners.