WBUR

The Depreciating American Dream: Homebuyer’s Remorse

Owning a home has long played a significant role in the American story; the notion that buying a house is the stepping stone to wealth and happiness goes back a long time. But the housing bubble has burst, and many local homeowners are living in the shadow of the white picket fence. This is Part 1 of a WBUR series: The Depreciating American Dream.

BOSTON — Calvin and Ateiya Sangster thought they were doing the right thing for their one-year-old son and unborn daughter, thought they were laying the foundation for a life of prosperity. Four years ago, they bought a condominium in Mattapan.

Soon after moving in, there was a candle in the driveway. Turns out, Ateiya’s coworker put it there.

“She happened to come to me and say, ‘Oh, you live at this address?’ ” Ateiya said. “And she’s like, ‘Yeah, I put that there for my brother. He was killed in your driveway.’ So, you know, it was kind of too late, we was already there when we started finding out a lot of things about the street.”

Things like the man who squatted in the foyer of their building. Or the addicts that rang their doorbell. They’d ask for one, two dollars, Ateiya says. Another time her wedding ring was stolen.

But none of that compared to the summer day when they had their windows open. Ateiya and Calvin heard two people arguing — right outside — on the sidewalk. They went to the window to see what was going on.

“They just started fighting and tussling,” Calvin said. “And once he had the guy on the ground he pulled out the gun and started shooting him with it.”

Their newborn daughter was in the room, too.

“And that’s where we were like, ‘We can’t keep her up here anymore,’ ” he said. “It’s just too much going on out here. I can’t wait to get off of this street.”

Now Calvin wonders why they were in such a hurry to get on the street — why they were in such a hurry to buy.

‘Thinking Businesswise’

Calvin fell in love with Ateiya — the way she looked at him with her steady brown eyes. She liked the way his bright teeth jumped out whenever he laughed, which was a lot. And when Calvin, Jr. — C.J. — was born, they were renting in Dorchester from Calvin’s grandmother. She lived on the next floor. His mom was around the corner.

“I was very content,” Calvin said.

They had it pretty good: a big two-bedroom apartment for $800. Ateiya was working and Calvin was training to be a union electrician. And they were putting money away. Not bad for a 23-year-old father and 20-year-old mother.

Then one day Calvin’s good friend, and C.J.’s godfather, came over. This friend had just become a realtor. He told Calvin that paying a mortgage probably wouldn’t be much more than the rented apartment.

“That’s when I started getting drawn in,” Calvin said. “Then he started saying all the pluses to owning. ‘You know you can resell it and make more money,’ and that’s where it caught my eye. I started thinking businesswise.”

Calvin talked Ateiya into it. “Dumb me,” he said, laughing.

A Moldy Bathroom, Jumping Interest Rates

At $170,000, the condo seemed like a good deal. But once they moved in, things started falling apart at the seams.

“You can see the house is kinda slanted this way,” Calvin said. “Because the floor became uneven the tiles started cracking and, you know, I tried to lay some laminate floor down but I’m not that great at it. It was my first time ever. You can see I still got a hole up there from my electrical wire.”

Calvin and Ateiya were paying $700 more to live in their condo than in their old apartment — almost twice as much. Add to that thousands of dollars more in repairs. Appliances crapped out. Doors wouldn’t close. Mold bloomed in the bathroom. The young parents feared they were hurting baby Aneiya and Calvin, Jr.

“We actually came in here one day when he was taking a bath, and he had a piece of paint in his mouth,” Calvin said. “And that’s when I was like, ‘Oh no, it’s too much.’ ”

So they spent close to $10,000 renovating the bathroom, figuring they would get it back down the road, anyway.

Then, two years in, the interest rate jumped. Calvin and Ateiya refinanced to get a fixed mortgage payment. Suddenly they owed $190,000.

But they were still hanging on to a dream they knew so well but didn’t really understand: the dream of homeownership. And then Calvin finished his training as an electrician. His pay almost doubled.

Calvin was happy. It was fleeting.

“I just graduated from school, I’m making the money and five days later — five days later — my foreman comes: ‘Calvin, I need to talk to you.’ Ugh, I couldn’t believe it. I knew what was coming because he never talks to me.” Calvin manages to laugh again.

A real estate advertisement from the 1920s: "The child raised in a rented house or apartment is CHEATED."

Coming Home

Laid off, money was only going out. Month after month, one thought kept coming back to Calvin: How much cash would they have in the bank if they’d just kept renting in Dorchester from his grandmother? That vanished number, which he calculates is about $80,000, amazes him still.

And it pains him, too, because $80,000 happens to be about all his condo is worth today.

“I’ve been regretting owning for a long time now,” he said. “I really regret owning.”

Calvin knew he had to figure out how to get that debt, that regret, off his shoulders. He had to make things better for his family.

Six months ago, Calvin and Ateiya decided. They stopped paying the mortgage. They’re giving up the condo.

Last week the couple started painting a new rental apartment. Their new old one, really. Because this week they’re moving back into the same building where they used to rent. His grandmother’s still on the next floor. Rent is still $800. Calvin’s mom still lives around the corner.

She stopped by to check out their new start — and the fresh coat of paint. At first, she wasn’t sure about their color schemes, but she says she likes what they ended up with.

It was so obvious, Calvin says. But it was so hard to admit that buying was a bad decision. At first, it felt like he was going backwards, losing his house. But now, he feels like he took a big step forward by going back to renting.

“Back at the bottom of it, but I feel more comfortable being at the bottom of the stepping stone than where we were,” Calvin said. “I feel much more comfortable coming back here.”

It was a costly lesson. The Sangsters had to give up their own place in order to come home.

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  • http://www.HealMyFamily.com Venus

    I am so glad this story has a happy ending. The jump in interest rates and the loss of Calvin’s job were circumstances beyond his control. Lots of people were hurt by the turn in the economy, due to no fault of their own. As such, there is no reason to feel failure.

    It’s awesome that the family members were owners (from BEFORE the insane real estate boom), so Calvin and Ateiya could have a place to return to without someone questioning their credit status. Hooray for the safety net of family!

  • Kimberley

    It hurts when I hear about good, hardworking people like the Sangsters losing their financial security. They did everything right. The uplifting part of their story is that their family is strong and they have the ability to move on emotionally. I truly appreciate them sharing their story. They have what money can’t buy: integrity and true family values. Best wishes to them.

  • wogga

    Some thoughts:
    As noted, this story could have turned out much worse, had it not been the strength of family.

    There’s a strange irony in the 1920s brochures (which is why I went online to see this article). How uncomfortable the ‘good ole’ days’ seems – all white, patriarchal, focused on the man of the house. (Although it looks like all the images are from the same source.)

    In the case of this family, it looks like fluctuating ARM mortgages weren’t understood and the risk for anybody going from renting to owning is having to consider the things that the landlord used to think about: the property, its location, taxes, how to pay the bank in good times and bad.

    I still think even when you’re buying into a bubble, as my family did, home ownership isn’t worse than renting when the rents are similarly priced: If you get a locked rate mortgage, you know your ‘rent’ for 30 years. If you can put away some money or have 2 incomes, you have a rain day fund. Even if you pay more to own than rent, you can file Schedue A on the IRS tax form and get 20-30% of your ‘rent’ back at tax time. Lastly, I think it does do kids well to know that their place is, if not really theirs (the bank owns it, not me) it’s stable and safe.

  • Cory

    I think that this story is RIDICULIOUS. About the only redeeming value it has is how little people think and research about some of the financial decisions they make.

    This couple took the words of their “friend” a new “real estate” and jumped into a MAJOR financial decision without doing any research. Then they are surprised that things came out bad!

    I know that that there were/are a LOT of disshonest mortgage people out there who wrote a lot a lot of bad paper, BUT COME ON – That does not mean that there is something wrong with home onwership.

    This new meme about renting is better seems to me to be the latest scam of the same exact crowd who sold all these people down the river with the interest only loans.

    Now they are going to rent out the distressed properties they are picking up for pennies on the dollar to the same people who lost them in the first place lisntening to THEM.

    I guess old Barnum IS right!

  • http://realestatecafe.squarespace.com RealEstateCafe

    Will any of the next segments in this series deconstruct this paragraph and related facts?

    “Then one day Calvin’s good friend, and C.J.’s godfather, came over. This friend had just become a realtor. He told Calvin that paying a mortgage probably wouldn’t be much more than the rented apartment.”

    1. Did the friend represent the family as their buyer agent?

    2. Did the friend or the new agent’s employer also represent also the seller (or developer)?

    3. If there was a conflict of interest, was the buyer informed that might bias the advice they were given?

    4. Regardless of whether there was a conflict of interest, was the buyer warned there were signs the housing market had peaked and prices could fall?

    5. IF the agent / friend initially said “paying a mortgage probably wouldn’t be much more than the rented apartment,” AND their friend / buyer client end up “paying $700 more to live in their condo than in their old apartment — almost twice as much” should the agent or their brokerage be held accountable for negligence?

    6. With one in four homeowners upside down on their mortgage, what regulatory reforms are needed to protect real estate consumers and prevent another housing bubble?

    7. Will the WBUR series end with some way to channel anger and ideas into real estate reforms and consumer protection? At a minimum, hope others are willing to join a working group. Here are some idea starters:

    http://bit.ly/ConsumerProtection20

  • Shawn Wilson

    Shame on WBUR.

    I listened to this segment, as well as Part 2. Both times mistakes were made by the families. The mistakes in Part 1 have been enumerated before me. In Part 2 the family dips into their 401k contribution money to afford a 3000 sq ft house and wonder why they aren’t happy. WBUR isn’t reporting on their bad decision making, they are saying the American Dream is dead!

    Also, what WBUR isn’t reporting on is all the upsides to home ownership such are the tax write-off for interest on your home loan and the THOUSANDS that nets you at the end of the year.

    WBUR alludes to the “fact” in Part 2 that home ownership doesn’t make as much sense or benefit families the way it did for the boomer generation. I’m 28 and my wife and I just bought our first house 4 months ago. We researched it, bought within our means, and are working hard to make it ours. We couldn’t be happier and the investment in our future can not be overstated.

    WBUR, you should be ashamed of your self for scaring people out of one of the most financially sound decisions a person can make. It’s a buyers market and if you buy smart (unlike the people profiled on your show) you’ll never regret it.

    Many people that bought in the last 3 or so years are in trouble due to no fault of their own, the housing bubble burst, but for WBUR to say that the American Dream is on the way out is irresponsible.

  • Tanya

    I’m sorry… I know this is not a great place to open a dialogue, but I have to say this (with kindest intent) in response to Shawn…

    Attitudes similar to yours are part of the reason some people feel pressured to buy even though its not the right choice for them. WBUR is telling the stories of a few people with this experience. We have decades of coverage of your opinion. Is it not okay to cover the other side?

    To be sure, some people can and do regret ‘buying smart.’ I know you don’t believe me, but it has to be said.

    Homeowning is not the best choice for everyone. Please consider accepting that. There is no shame in it.

  • http://twitter.com/ms_q Andrea Q

    WBUR is not the first to cover the idea of the changing American Dream. CBS did a twp-minute segment on it last August:

    http://moneywatch.bnet.com/economic-news/video/better-to-rent-than-buy/331344/

    Many financial websites have also done articles discussing why, in this market, renting can be better than buying. Of course, those articles focus on dollar amounts, not the personal reasons that factor into the decision.

  • Shawn Wilson

    I’m not saying there’s shame in not owning a home. But I’m shaming WBUR for the coverage.

    When journalists analyze a situation they should do it in a balanced way. WBUR is crying the death of the American Dream of home ownership. Young people who would benefit from this buyers market can hear this and get the wrong idea about home ownership and stay away from it. In six years of renting, my wife and I threw away around 125,000 dollars in rent. In my home town, that could buy outright 3 houses.

    For WBUR, a trusted and influential news outlet to say the dream is dead and portray home ownership as a burden not worth the effort is socially irresponsible. It’s like to say that raising a child isn’t worth it because they cost money and will eventually tell you that they hate you. It just doesn’t portray the whole reality of the situation.

  • Monica S

    I am sorry for the family’s hardship. It does not seem like an appropriate story however. I’m glad they are doing better, but it seems like their rent was artificially low and jumping to a normal mortgage payment was an understandable hardship.

    And would the article please notice that the dream of homeownership has worked out pretty well for the Grandmother – she’s able to be there for her family.

    Again, I’m sorry the family had such trouble and am so happy they are back in a better place, but I do not think this item made any point.

  • Brian

    Were these people not aware of Mattapans reputation? I don’t feel sorry for them, it’s called doing your research. Would you invest your life savings in a stock and know nothing about the company? Would you buy a used car without a test drive or checking the blue book value first?

  • MargaritaK

    Shawn wrote:
    “In six years of renting, my wife and I threw away around 125,000 dollars in rent. In my home town, that could buy outright 3 houses.”

    It’s the above attitude that pressures young and old alike to feel like they have to buy a home. Renting is not “throwing” money away. Rent is an exchange of money for a place to live, to hold your stuff and shelter you from weather.
    Paying in excess of $1700.00 a month in rent for two people may seem a waste of money but if one is living in an area with that work that pays well enough to make $1700+ per month manageable, again how is it a waste? Especially when the hometown fondly referred to above is not where the poster lives. Let me a guess, there were no jobs paying wages high enough to make $125,000 or even $45,000 home affordable.

  • Shawn Wilson

    Margaritak wrote:

    “Paying in excess of $1700.00 a month in rent for two people may seem a waste of money but if one is living in an area with that work that pays well enough to make $1700+ per month manageable, again how is it a waste?”

    This was a waste, as compared to home ownership, in that we paid another person’s mortgage AND interest AND profit while we lived there. Now that we’re in a house, we’re paying negligibly more, are building equity, getting a $4000 break per year in taxes due to our interest deduction and we have a place that we can actually make our own.

    Renting isn’t a waste if you can’t buy. If you don’t have any money for a down payment or if you can’t qualify for a loan. But it makes no long term financial sense to rent. In the 3rd installment of this series a couple that lived in an apartment, the same apartment, for 40 years was interviewed. They said that they believed that have more money in the bank because of renting. Well, if they had taken out a 30 year mortgage, they wouldn’t have had to pay housing costs (aside from taxes) for 10 years. That’s an amazing amount of money that they would have been banking. Plus, they’d have an asset worth hundreds of thousands of dollars. Now, they have neither.

    Listen, if people don’t want to buy a house, fine. I have no problem with that. I think it’s a mistake most of the time, but it’s not my life. The issue I have is that WBUR is not covering this story well. Instead of decrying the death of the American Dream they could have had a financial and real estate expert come on after the first two segments and explain why the families made poor decisions with their money and housing. We could all use this as a learning experience instead of saying that the American Dream is dead and leading people to believe that buying a house is a bad idea.

  • http://twitter.com/ms_q Andrea Q

    I’ve listened to all the segments and I didn’t hear anyone say that the American Dream is dead. If you Google “buying vs. renting” or something similar, the vast majority of the articles detail how buying is financially better (except in very specific situations). I think you are overestimating the power of WBUR!

  • Thinker

    I have to say, I was disappointed when I heard part 1 of this series. WBUR seemed to miss what stand out to me as major red flags. I feel sorry for the homeowners, but their first mistake was buying in a location where they did not know the crime statistics/relative safety. Mistake #2 – shared by many in bubble times, was the adjustable rate mortgage. Mistake # 3 – not seeing the difference in “He told Calvin that paying a mortgage probably wouldn’t be much more than the rented apartment.”, and “Calvin and Ateiya were paying $700 more to live in their condo than in their old apartment — almost twice as much”.

    It seems like this story does not reflect the disappearing American dream, as much as two young parents who made some major financial mistakes, while caught up in the HGTV inspired “Home values only go up” hysteria.

  • anon

    Andrea said: “If you Google “buying vs. renting” or something similar, the vast majority of the articles detail how buying is financially better (except in very specific situations).”

    Very specific situations like a massive price bubble that inflated housing prices to roughly twice what they should have been based on the last 100+ years of data and which has yet to fully correct in at least some areas of the country?

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