Helter Shelter
Nashvillians aren’t feeling the foreclosure pain like folks in the Midwest, Southwest and Florida are feeling it, but it looks like we are going to have our share of folks who owe more on their house than the house is worth. Some of them will find ways to refinance their loans. Others will just walk away from their house and let the bankers and accountants sort it all out.
Sooner or later, somebody will buy those repossessed houses. Right now, I’m sure some folks are thinking, “With all these McMansions sitting empty, we might be able to buy a million-dollar house for half-a-million dollars.”
Well, that just might happen. But if you’re thinking about buying a foreclosure house, there are some things that you need to keep in mind. First, consider that folks who couldn’t keep up their mortgage payments might have had problems keeping up their house.
For instance, they might have let a roof leak go without repair, they might have postponed maintenance on their heat-and-air systems, or they might have turned the heat-and-air systems off. Believe me when I tell you, a house with no A/C can go bad in just one hot, humid summer. Back when I lived in South Carolina, my A/C system failed during a spell of 100-degree weather that lasted more than a month. My house turned into a mold farm in about two days. In those days, before there were multi-million-dollar “sick house” lawsuits, we just called the mold “mildew” and went about our business. Today, if a house gets moldy, the owners’ insurance company usually orders the family out of the house and into a hotel, until the hazmat crew cleans up all the “toxic mold.”
If a family abandons a house in the winter and shuts down the heating system, pipes can split and dump an endless supply of water into the house. When that happens, ceilings collapse, floors warp, plywood delaminates, and mold starts growing in the walls as soon as the house warms up in the spring.
Worse yet, some people strip their own house for parts. I’ve heard reports of a few local folks ripping out the washer and dryer, the stove, the microwave, the dishwasher, the toilets and the bubble tub. I’ve heard long-distance reports of folks removing—or trying to remove—their granite counters and refrigerators. And don’t you know, some folks have ripped out copper plumbing and hauled off the heat-and-air equipment, just so they could sell the copper at the scrapyard.
If stripping houses for parts gets to be commonplace in our part of the world—and let’s hope it doesn’t—that million-dollar house you might’ve bought for a half-million before it was stripped could end up selling for a quarter-million. Problem is, the cost of repairs will probably eat the equity you were hoping for.
And there’s this: After the market hits bottom and starts back up again and there’s demand for new houses, who’s going to build them? If the new-house market stays down long enough, the itinerant laborers who built the last generation of houses will likely move on. That would be just fine if the existing labor force were replaced by moonlighting NASA engineers. But from what I’ve seen in the last 20 years, the skill level of the tradesfolk building houses in Middle Tennessee has gone steadily downhill. The trend, it seems, has been for builders to hire the cheapest and least-skilled laborers available. I’ve seen no tendency toward hiring better-trained—and more expensive—workers. The skill level of the workers who build the million-dollar and multi-million-dollar houses is the same as workers who build starter homes. It’s stuck somewhere between adequate and unforgivable.
A few days back, I had an online discussion with some of the savvy builders and home inspectors I know. One of the participants threw out this question: How long should a house last? After a rambling conversation, we agreed that the rule of thumb we’d always heard was a hundred years. A few minutes later, though, the consensus was that today’s houses are built to last about 30 years—just long enough for the owners to pay off the mortgage. After that, it’ll be time to tear down the house, haul the scraps to the landfill and build another 30-year house. (If you’re eco-sensitive, just start pulling your hair out now.)
Maybe it’s just me, but this seems like a perfect time for savvy home buyers to look for long-settled neighborhoods, where the houses have already proved that they can last for at least 50 or 60 years without breaking, leaking or rotting. Taken as a breed, houses built in the ’50s and ’60s have everything a family needs—and nothing a family doesn’t. Better yet, the people who built them knew how to lay block and brick and how to measure twice and cut once.
Unlike so many new “communities,” an old established neighborhood isn’t going to lose its value overnight. If I were looking to buy a 21st century dream house tomorrow—one that would increase in value and generate enough equity to keep me out of the poorhouse—I’d look for a modest brick-veneer or stone-clad rancher about 50 years old, solid, well-kept and parked under trees that are taller than the houses.
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