Being able to buy a home is as insurmountable a goal as you want to make it.
By that its means how willing are you to engage in delayed gratification, financial discipline, and set aside wants to concentrate on needs.
Every time I hear someone who has a good job with steady income say that they want to buy a house but can’t afford to do so I think back to two interviews I did for Bulletin real estate stories in the 1990s — one in 1993 and the other in 1999.
The 1993 story was a feature on the buyers that bought a modest three bedroom, one bathroom home of less than 1,150 square feet in Lathrop. What made the story stick out were the buyers’ jobs and financial status. The husband was a farmhand who had secured year-round employment working for a farmer that had a variety of agricultural operations in the area — field crops, orchards, and even a hog farm near the Sacramento County line. The wife had seasonal work roughly seven months out of the year at canneries. They had three children.
The home they bought in 1993 was under $65,000. They did it through a FHA loan with the required down payment that no one helped them with.
How did they do it? They were frugal. They made their own meals and bought in bulk — 50 pound sacks of rice and 50 pound sacks of beans. Thrift stores clothed the family. Entertainment was what they could do free as a family.
They also sat down with a loan officer at a mortgage company at no cost that gave them tips on what they needed to do. She also advised them that given the seasonal work was consistent, the unemployment the wife got for when she was not working could count toward income needed to secure a loan under rules in place at the time.
It took them almost three years to be in a position to buy. They viewed buying a home as a top priority not just for their family but ultimately their retirement.
It should be noted the market in 1993 was still recovering from a backslide after the Manteca median closed escrow price peaked at $135,000 in 1989 and slid to $124,500 by 1993.
The 1999 story was as the market was heating up. It was when longtime Manteca real estate agents were stunned when two bedroom and one bathroom homes less than 1,100 square feet in areas such as the 900 block of Pine Street were selling for what they believed was an astronomical price of $92,000.
For the record, that same home sold in November of 2017 for $257,000.
The buyer in 1997 was a young family.
The wife was very focused and determined. She had gotten pregnant when she was 16. She decided that she, her baby and the baby’s father who she eventually married weren’t going to end up as people expect those in similar situations to do.
She made sure she got her diploma. Both she and her husband worked. There main financial goal was to buy a house.
By the time she turned 22 in 1997 and her daughter was 5 years old they bought an older house in central Manteca. It did not have bells and whistles. It was basic shelter.
I did not keep track of either home buyer but I’m willing to bet both are pretty stable financially today with the young couple likely to have moved up.
The point is simple. Both buyers bought when a lot of people who were better off couldn’t afford to do so.
That’s because they knew what they wanted. They then sought out advice on what they needed to do. And then they did what they had to do.
They had a plan, understood delayed gratification, and didn’t confuse needs with wants.
They were able to afford to buy a home when conventional wisdom would have said it was impossible for someone in their situations to do so.
Sit down with a loan officer for a free heart-to-heart and be honest. Pay down debt. Avoid buying luxuries so you can save. Cut down on entertainment such as going to the movies and dining out. Think of living more frugally.
It can and often does lead to homeownership. And in a town like Manteca where it is common for 40 percent of a household’s income to go to housing costs, once you buy a home in a few years it starts stabilizing your costs and you can afford more things.
It’s not magic. It’s resolve.
To contact Dennis Wyatt, email firstname.lastname@example.org