Some years back a local bank president commented that there’s really no bad time to buy a house.
When prices are high, mortgage interest rates tend to be low, he said, adding that the flip side — when interest rates are high, prices can be low — is also true. And, of course, a high interest rate can be renegotiated when rates fall, something many homeowners did over the last decade.
All that might have been the case once, but certainly not since the economy came to a screeching halt in the fall of 2008. Housing prices and interest rates both plummeted, yet buyers have been few and far between. So many people considered their home equity an ATM that their mortgages now exceed their property’s value, a phenomenon described as being “under water.”
All of this pretty much silenced the Town Hall talk about the need for affordable housing. The only such project still in the works is the Summerwind apartment complex in downtown Riverhead. The larger issue now, particularly for younger residents, is finding and keeping a well-paying job. Then if people like the couple quoted in this week’s real estate story earn enough to make the mortgage payments, they’ve still got to cobble together enough for a substantial down payment and other up front costs.
The buyer of a $300,000 house can expect to pay almost a third of that before getting the keys.
The days of the 105 percent mortgage with little, if any, down payment appear to be gone for good. So, too, are housing values appreciating by double digits each year.
So where does that leave the 20- and 30-somethings who grew up here and want to work here, make a home here and raise their families here?
There are no easy or obvious answers, but it is clear that local government must reconsider the roles it plays in the lives of those who are most likely to leave the North Fork for a better life elsewhere. As economic circumstances have changed rapidly and dramatically, it’s no longer enough to push for more housing projects; we’ve got housing aplenty in the “affordable” range. The trick is finding ways to keep our kids here and helping them get into those homes.
We won’t solve new problems with old thinking.