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Dager: Others' debts delay needed remodeling
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When my husband and I bought our third home 14 years ago, we had to give the lender a 25 percent down payment because we were self-employed, despite having excellent credit and the fact that we weren't exactly buying a mansion.
We did everything we could to get into our run-down, beat-up 1967 ranch-style house, which was in a good neighborhood on a nice-sized piece of property. We liked it because it had what we optimistically called "potential." Still, I was apprehensive when we signed the papers because our new mortgage payment was a few hundred dollars more per month than our old one. What would we do if work dried up, or if my husband had health problems? We considered these things and tried to plan for them. We didn't go on expensive vacations or buy a new car every year, and we limited our dining out because that's what grownups are supposed to do to protect their families.
Almost a decade-and-a-half later, we've never missed a payment; never failed to pay our property taxes and we've made improvements, albeit slowly. We finally remodeled the master bathroom last year, with its dented old cabinets and kitschy gold-veined countertop. We painted and carpeted the rest of the house, but, after raising two kids and owning numerous pets, we need new carpeting and paint, and we simply must get rid of those hideous "popcorn" ceilings.
Some day. Not right now.
And that is why people like us are a little exasperated with the folks who got into a sparklin' new house with no down payment, lousy credit and encouragement from unscrupulous lenders. Of course, there's more to the credit crisis and bailout than that particular portion, but it's what the average homeowner is thinking about.
We don't begrudge our neighbors for wanting a nice place to live. For goodness sakes, that's a big part of the American dream. It's not as if we're so heartless that we're gleefully rubbing our hands at the thought of people being booted from their homes.
What annoys us is that there are those who jumped into a schmancy house they thought they mighta-maybe-probably-sorta could afford, and now they're drowning, so they believe that the rest of us — the slowpokes who take 13 years to remodel an already-decrepit bathroom — should help them keep their homes.
Life, as they say, is not fair. But, man, this is really stretching the unfairness. Let's say they had no idea that interest-only loans and zero down payments were a bad idea, and that it truly was the bank's fault that they got suckered into their $4,000-per-month house payment. While they were signing those hinky documents, I was staring at my hippie-era sink, wondering if I accidentally got enough hair dye on it, would that make it look new. It didn't. We had to visit a back-alley granite dealer and pay what I thought was a small fortune for a stupid countertop, with my stomach in knots as my husband worked out a deal.
That tremendous anxiety occurred just because of a hunk of rock that was going into our bathroom. We were committed to that piece of granite. There was nothing easy about the decision. Maybe that's a weird reaction from someone who's not a child of the Depression, but I simply don't understand how anyone — whether or not they fully understood the potential ramifications of their loan — could cavalierly purchase an entire house as if it weren't a large-scale commitment.
I have two other 40-year-old bathrooms that need remodeling. I can postpone it a while longer. I just wish the wait wasn't because of someone else's debt.
— Wendy Dager of Simi Valley writes a biweekly column for The Star.
Posted by mikeb6804 on October 9, 2008 at 6:45 a.m. (Suggest removal)
Wendy -- you represent a mindset which has either been forgotten or never learned by the knuckleheads who now find themselves on the brink of foreclosure. It's really hard to feel any sympathy for them. Anyone who promoted this disaster shouldn't get any kind of a pass either.
Posted by USA_ROCKS on October 9, 2008 at 8:53 a.m. (Suggest removal)
Wendy
So true. We are experiencing a culture of corruption, deplorable ethics, and desire for short term gain at the expence of long term viability.
Posted by nannyfo1 on October 9, 2008 at 10:18 a.m. (Suggest removal)
My wife and I are closing escrow this week. We found a 30 year old home in a nice neighborhood that we could afford. This is our first home purchase. When we applied for the loan, the amount that the lender approved was shocking. Had we borrowed the max, we would not have been able to make the payment. We are borrowing about 2/3 of the total we could have. Our house will need some repairs, but I can do them. I have little sympathy for folks that got in over their heads. I have even less for financial institutions that extended lines of credit they should have known would not be repaid.
Posted by mikeb6804 on October 9, 2008 at 11:02 a.m. (Suggest removal)
nanny -- congratulations on your home. You are buying it as a solid culture intends. I hope it will be a happy place for you to live. From experience I can tell you that repairs and improvements you make yourself will be enjoyed that much more!
Posted by 5thGenerationOxnard on October 9, 2008 at 2:49 p.m. (Suggest removal)
Wendy, I believe this is the most insightful piece you’ve ever written. Thanks.
Posted by Danyellow on October 9, 2008 at 10:28 p.m. (Suggest removal)
It looks like you arent the only delaying your remodeling plans..remodeling like everything else looks like it is down down down for a while
15% decline in Home Remodeling Activity in 2008 – Biggest decline in areas where homeowners have less home equity
Sunnyvale, CA – The fall 2008 www.remodelormove.com Remodeling Sentiment Report, a semi-annual survey of 5,000 U.S. homeowners, reveals how the amount of equity homeowners have in their property affects their remodeling plans..
Homeowners participating in this most recent survey reported an average of more than $190,000 of home equity and average home values of $390,000, up from $140,000 and $342,000 respectively in the previous survey. The increase in home value and equity from respondents indicates that homeowners who have less home equity or who are living in lower-value homes have put their remodeling projects on hold, while homeowners with more financial resources are moving ahead.
This finding is in line with the www.remodelormove.com U.S. Remodeling Permit Activity Report, which shows an increase in the average cost of a remodel in markets with the most expensive homes and a decrease in regions with average and below average cost homes. The sampling of U.S. remodeling permits shows a decrease in planned remodeling spending of almost 15 percent in the first half of 2008 versus the first half of 2007.
Homeowners who choose to remodel their homes may find this is a good time; with new home construction at low levels, more materials and labor are available for remodeling than several ago, resulting in shorter project schedules and often lower project costs.
Key findings from the fall 2008 survey include:
84 percent report that the possibility of a recession is affecting their remodeling plans.
81 percent plan to start their home remodel this year.
Regarding cost saving efforts, homeowners report they are planning:
Not to hire a general contractor – 34 percent
To use economy materials – 10 percent
To do some of the work themselves – 65 percent
Other findings from the fall 2008 Remodelormove.com Remodeling Sentiment Report
Homeowners are:
o Excited about remodeling – 48 percent
o Dreading remodeling – 11 percent
Homeowners’ plans include:
o Kitchen remodel – 55 percent
o Bathroom addition – 49 percent
o Bathroom remodel – 49 percent
o Addition of one or more bedrooms or den – 39 percent
o Enlarge or add a garage – 19 percent
o Finish a basement – 13 percent
Although this may feel like a risky time to remodel, that may not be the case. By carefully preparing and following “A SMART Remodel” strategy, homeowners can minimize the risk and maximize the results.
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