Two new real estate books, and the stories not yet told
Three years ago, I put a down payment on a new house, and put my current house house up for sale. Never once did I think my first house would fail to sell. Not once.Today, the mindset seems loony. Unimaginable. How could I not have anticipated it? While I blissfully spent my future profits in my head, and started buying furniture for my new sweet brick cottage, I began to read newspaper reports about a downturn in the housing market. But never underestimate the power of denial. I became one of many, stuck with a house I could not sell, two mortgages and a bucketload of stress.Two new books on the real estate meltdown let me know I was not alone in my magical thinking. In Busted, Edmund Andrews, a New York Times reporter, tells the story of how he bought more house than he could afford while reporting on the housing meltdown for the paper. He understood the ins and outs of the credit swap market before the rest of us knew the word "subprime." Still, he jumped into the fray, ruining his finances and personal life along the way. (The best commentaries on Andews's much-commented upon, problematic book come from Megan McCardle.)I wish I had known Alyssa Katz back in 2006, because she has been investigating the real estate market since 2004, and her new book, Our Lot: How Real Estate Came To Own Us, introduces us to more magical thinkers: the middle-class couple who decide to spend their savings on swampland in Florida (I kid you not), the handyman who started buying and flipping and made out great until he could no longer flip. Today, he is stuck with several properties worth less every day.Me? I decided the market could get no worse after my house sat for a year. So I took it off the market and rented it for another two, becoming one of the world's least competent landlords (thank goodness nothing went wrong with the house), allowing rent to come in late, covering utilities myself, and always operating at a loss. (Turns out I'm in great company-Timothy Geithner can't sell his house, either, and has also turned to renting.)This spring, I put the house back on the market. When the agent told me what she thought I could get for it, I blanched. All I could hope for was to break even, after I paid off my mortgage, home equity line of credit, closing costs and the credit card I used for house expenses.And that is what I got. Or hopefully will. The deal closes next week, and my fingers are not yet uncrossed. I feel nothing but remorse. After all, I could have made the same move-lowered the price drastically-three years and thousands of dollars ago.