Today's prices for housing inconceivable in the 1950s

July 06, 2004|By MICHAEL OLESKER

IN THE MORNING paper's real estate listings, I see homes going for a song. In Towson, a colonial on Morningside Drive lists at $399,000. In Columbia, there's a dandy on the edge of woods that's considered a steal. At $465,000. At the new HarborView development, just off Federal Hill in South Baltimore, townhouses are "available" at $1.3 million. Some of the songs read like grand opera.

How did they reach such astonishingly high notes? A friend searches for a home in Remington, near 28th Street. Why Remington? Because, the friend explains, Hampden has gotten too pricey. Scruffy, unassuming Hampden? Too pricey? When, in the course of our extended lifetimes, did we ever expect to hear the conjunction of those precise words?

Another friend lives on Collington Avenue, a few blocks from Patterson Park. This is a classic East Baltimore rowhouse. My friend's parents bought the house before World War II. For about $3,500. Months ago, my friend says, a family moves into the neighborhood at precisely 100 times that price.

This brings me to the late Dave Hyatt, whose family lived across the street from mine when I was growing up. Dave's the guy who founded the Hyatt's Men's Store clothing chain. But this was the early 1950s, the postwar years when everybody was starting their lives over and scrambling for the buck.

Dave's wife, Melba, has just given birth to their second son. The apartment where they're living is now too small, so Melba says, "You've got to find us a bigger place." Dave happens upon Crawford Avenue, about midway between Reisterstown Road and Liberty Heights Avenue. He sees a brand-new semidetached house for sale: $12,000. Today, the eyes weep overflowing sentimental tears at the memory of such a price.

Dave goes inside, and he loves the place. He tells the real estate agent he'll fetch his wife and come back to look at it. The Realtor says: "I can't hold it, it's the last one I've got. Someone else may get here before you. I'll need a down payment to hold it."

"I've only got five bucks on me," Dave says.

"I'll take it," the Realtor says.

In a world of $1.3 million townhouses, and the historically humble neighborhoods such as Hampden getting "pricey," can anyone imagine such a conversation today?

In the past 10 years, while the Consumer Price Index has risen 21 percent, the government's national housing price index rose 52 percent. Across the nation, home prices rose 7.5 percent in the last year. In the Baltimore metro area, they rose 15 percent. The average price was $211,636. Economy.com ranks the area as the fifth-most-overpriced market in the United States.

In Anne Arundel County, where housing prices have shot up faster than anywhere in the Baltimore area, the average home today sells for $280,000. The median family income there is about $70,000. Last winter, House Speaker Michael Busch sat in his office bemoaning those numbers. The backbone of the county's work force, he said - cops, firefighters, teachers - are moving to the Eastern Shore and Western Maryland for housing they can afford. They have to commute to work each day.

Two weeks ago, the Annapolis city council took notice. They voted to impose "affordability" requirements on developers - requiring them to build cheaper units in new subdivisions with more than 30 houses. A similar countywide bill is expected to be introduced this month.

In a world where Realtors and contractors contribute big money to political campaigns, and tacitly expect recompense, this is no small gesture for any group of elected officials.

The good news about housing is this: The prices reflect the lowest mortgage rates in decades and have prompted many to grab homes while they think they can. The more troubling news is: Because so many people have been anxious to grab those low rates, it's a seller's market.

The worse news is: It's therefore a brutal market for working class and poor people, and for young people looking to buy their first homes.

Maryland is the fourth-most-affluent state in the United States. But an estimated 100,000 families are living around the poverty line. Where's that line? It's $18,660 a year for a family of four. Try buying a "bargain" six-figure home on such money. In 2002, according to the Baltimore-based Job Opportunities Task Force, 10 of the state's 24 subdivisions had more than 8 percent of their families living in poverty.

In the past two decades, homeownership rates for low- and moderate-income families with children have declined noticeably. Across the United States, 68 percent of all households owned a home in 2001. But, for working families with children - meaning, in the Baltimore area, income up to $36,000 a year - the rate has dropped to 56 percent.

Never mind housing for the poor. At today's prices, they can't afford a down payment, even if it were the modern equivalent of Dave Hyatt's last five bucks.

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