College kids capitalize on post-foreclosure-crisis prices
posted at 3:40 pm on November 14, 2011 by Tina Korbe
Maybe it’s that the Occupy Wall Street protests have reawakened a latent sense of avarice in me. Maybe it’s that Michael Moore’s vacation home makes me believe I need not be super rich to have a huge house. (After all, according to him, he’s not a member of the 1 percent — and he has two megahomes!). Maybe it’s just that I’ve visited one too many an antebellum mansion (I do do that). Whatever the reason, I’ve found myself fantasizing about my dream home a lot lately.
To make it a reality, I should move to Merced, Calif. There, University of California at Merced students have scored a luxury lifestyle at astonishingly low prices:
Merced, in the heart of San Joaquin Valley, was ranked the third hardest-hit city in the country for home foreclosures, leaving whole communities of sparkling luxury homes vacant and depreciating, the New York Times reported. For these UC students, the “housing crisis” is an embarrassment of riches.
“I mean, I have it all!” Patricia Dugan, a senior majoring in management, told the Times from her master bedroom suite flooded with California sunshine.
The five — sometimes six — bedroom manses that often feature chandeliers, Jacuzzis, walk-in closets and swimming pools can be had by students for peanuts. Several thousand McMansion dormers who have their own bedroom and a private bath pay just $200-$350 in monthly rent.
As Heritage Foundation housing expert Ron Utt said in an e-mail, “It’s nice to see some productive, revenue-generating uses for otherwise vacant property.”
But while the students strike it lucky, their mortgaged, non-foreclosed neighbors are still underwater, some paying $3,000 a month for homes that were once worth half a million and now would draw just a couple hundred thousand. Sadly, they’re not alone. Some 11 million — or nearly a quarter — of homes are in negative equity, according to Jim Pethokoukis. We’ve already seen that President Obama’s recent unilateral proposals to help homeowners are likely to be ineffective. Negative equity is a problem that can’t be solved just by helping folks to make their payments: Home values will go back up when an increased number of qualified buyers swell demand. For that to happen, we have to solve the unemployment problem — and, to do that, we have to implement common-sense solutions, chief among them a reduction in regulations.