Not far from where my parents and I currently live is a brand new development. It is full of big, fancy looking houses that likely have little or no craftsmanship in their builds. I think there are at least a dozen houses but there are likely more.
It is one of many new developments that have been built here in the Camas, WA area. There is one not far from here that makes me think of the Muggles houses in the Harry Potter movies - every house looks exactly the same.
As I was walking the extra-wide sidewalks of the development closest to me, I started doing the math in my head. $400,000 - $800,000 or more for each house. Few if any of these houses have been paid for in cash - it is most likely that loans were taken out to buy them.
Well things don't add up. In order to be approved for a house loan at your local bank or credit union you have to go through a bunch of hoops, you can't be hugely in debt and you must have some sort of collateral. I am pretty sure I am right about these general terms.
So that means each individual or family buying a house in the development would have had to have shown enough collateral or earning potential to get the initial loan for the first payment. Say 10% or so of the houses full cost. Likely it is far more. That means folks have at least $40,000 - $80,000 worth of whatever value is required.
Minimum wage is roughly $12.00 an hour. If you work 8 hours a day, 40 hours a week, you earn $480 a week, $1,920 a month. You probably don't have 40k of assets lying around. That means anyone earning minimum wage can not afford these houses.
In fact, it is likely that the monthly payment for each house before interest is around $4,000. I can't imagine there are many folk who are earning $4,000 a month. They would have to be in the minority, wouldn't they? I don't think all these houses are owned by business owners, lawyers or doctors. Can't be that many in this area.
But here is what doesn't add up... If you drive around this area, you will find a LOT of traffic, from the early morning to midnight. All these people driving around, and certainly most of them live in these houses. That means they are not going to work, earning the money needed to build any assets or pay their monthly bills.
If you add up your house payment, utilities. internet, cell phone bills, health insurance, life insurance, housing insurance and car payments - that is a LOT of money that folks should be working hard somewhere to earn. Yet they are all driving around during the day!
How is it these people are earning money? And how is it they got approved for loans to live in these houses? And how could an average hard working minimum wager ever hope to get themselves into one of these houses? What is it these people are actually doing during the day, other than going out to shop, eat or spend more money to go on vacation or buy toys?
I am confused by this. It seems to me that these people are living in some other reality than my own, even my parents and the lady they rent space from. How is it they found their way to jobs where they do not have to report to work somewhere, or even if they do, they are paid so hugely and well for whatever it is they do?
How do they pay all their bills, and at the same time managed to gather enough assets to use as collateral they can get a fancy new house? I heard children playing in one property. That's even more of an expense, a couple hundred more each year at least, and still more than that if their children have good medical and dental plans.
It doesn't made any sense! Going to college is not the solution either. A lot of influential people will tell you that going to college is how you get the higher paying jobs. But I am an honors graduate and I can't find any work at all, much less high paying work. I simply can not see how these folk somehow went from my position when they were younger and now have the kind of money to throw around to get these houses, without any equally great commitment to some workplace somewhere.
I know that somewhere in this development there are multiple families living together, sharing the load. Maybe they have connected friends who co-signed for them. And there have to be a few folk who work 80+ hour work weeks somewhere. But these are in the minority.
Most of those who live in these homes are a couple, some with children, most without. Usually they are middle-aged. Two-people in a sprawling, 4,000+ square foot house, 3-4 bedrooms including a master bed and bath with a walk-in closet. All that extra space they neither use nor need. Yet my parents couldn't even afford to rent a 1-bedroom apartment.
The worst thing about this is that nobody questions the system. Nobody spares a thought as to the ecological and economical impact these developments have. Nobody wonders how people are affording to live in these places. Nobody wonders why there is so much traffic during normal business house, when people should be at work. Everyone drives along, lost in their own little world, many trapped in a different reality than the one others seem to be living and thriving in. Why is that?
