Real estate’s class divide…


…seen from the other side

At any party or social gathering in Glendale, the topic of conversation invariably gets around to real estate. Nothing unique to Glendale — mortgage rates and the price of homes have been a national obsession for years. But it has been particularly manic here in Southern California, home to one of the biggest real estate bubbles of all time.

I’ve been in dozens of those conversations. “Did you hear what the Jones’s house sold for?” “Have you refinanced?” “I’m thinking of getting a broker’s license.”

In the last three years, of course, the tone of the conversations has changed. Now it’s “There’s another foreclosure on our block.” “We’re under water, but hanging in there.” “Do you think the market’s turning around?”

Back in the heady days of 2006, my wife and I were homeowners in Glendale’s Verdugo-Woodlands neighborhood. Like everyone else in our situation, we watched our home value soar and our home equity cushion grow. That was going to help fund our retirement and our kids’ college education.

We had bought our little two-bedroom bungalow in 1998 for $289,000, and eventually put another $100,000 into it, including an addition with a third bedroom. Even with a big home equity loan on top of a mortgage, by 2006 we were way ahead of the game, so far above water we couldn’t see the waves. We and our neighbors toasted our good fortune.

But not all of our friends were hoisting glasses. Some were renters, and for them it was an entirely different conversation. Their dream of home ownership was slipping out of reach. Those conversations could get a little uncomfortable, as our dream of fat home equity cushions became their nightmare of unaffordable housing. And their hope of a real estate crash bringing prices back within their reach was our nightmare.

Reading real estate blogs in 2006 (didn’t everyone?) was a sobering experience: Homeowners cheered the bubble and rooted for more price gains, denying the possibility of a crash. Renters, angry at being priced out of the party, excoriated the greed of home sellers. They predicted an armageddon that would punish the avaricious and reward those who waited on the sidelines. It was out-and-out class warfare: land owners vs. serfs.

That same year, I accepted a transfer from my employer and we moved to Washington, D.C. We sold our house in V-W at the top of the market, and packed what seemed like suitcases full of cash (figuratively) for our move back East.

Put simply, we were drunk on home equity. We bought a 3,200-square-foot house in suburban Vienna, Virginia. We knew we were paying too much and that prices were not likely to keep moving up. But we could afford it, we told ourselves, and felt we deserved it after living in small houses for 18 years. Plus, we were planning to live there for many years, not trying to flip it.

Then came the crash of 2008. I lost my job, and we ended up back in Glendale. We couldn’t sell our house in Virginia, but we managed to keep up the huge mortgage and tax payments and avoid foreclosure by renting it out.

We put it on the market for sale three times over a two-year period as its value eroded, before we finally sold it in 2010. We were luckier than many — we weren’t under water, but we lost almost half of that big home equity pile we had accumulated over two decades of home ownership.

Today we are renting a little Spanish bungalow in Verdugo-Woodlands, about six blocks from the home we once owned — which, to add insult to injury, has been painted a hideous lime green by the new owners.

These days, I see those Glendale real estate conversations in a different light. I sympathize with our neighbors who are struggling to hold onto their homes, or have seen their nest eggs evaporate. They talk hopefully of a market rebound, a day when prices resume their upward climb and make them whole again.

That’s when the conversation becomes a little uncomfortable — for me. I know that our only hope of getting back into home ownership is for prices to keep falling, maybe another 10 or even 20 percent. We still have a decent sum in the bank, but not enough for a prudent down payment and a manageable mortgage at current prices.

In truth, given our age (mid-50s) and with two kids to put through college, I’m not sure it will ever make sense for us to be homeowners again. Those are the cold, hard financial facts, but emotionally it’s hard to give up on the dream of owning your own little patch of the Earth, especially when you had one for 20 years.

Economists talk about a possible double-dip recession in 2012, and another wave of foreclosures waiting to flood the market. What a miserable prospect — and what a hopeful sign for us. It gives me no pleasure to think that, but there it is.

Among friends, I keep my thoughts to myself. I don’t rant on blogs about greedy home sellers, having been one myself. I sit silently on the sidelines, a renter in the neighborhood where I was once an owner, waiting and watching from the other side of the property class divide.

That’s my Glendale real estate story. What’s yours?

Re-thinking Glendale High


It was late 2005 when it finally hit us: Our son, an 8th-grader at Wilson Middle School in Glendale, was fast approaching The High School Years. It just sort of snuck up on us.

When we moved to Southern California from the Midwest in 1998, my wife and I chose to live in Glendale—Verdugo-Woodlands in particular—over the alternatives of Los Angeles and Pasadena because of the public schools. V-W Elementary is a special place, as everyone in that neighborhood knows. Wilson: pretty good, too.

Then there is Glendale High. We were warned by friends and neighbors and Realtors that we might not want to send our kids there. But in 1998, our kids were 6 and 4, and high school was years away. We figured we’d deal with that then.

Suddenly, it was then. Like a lot of parents we knew who were in the same boat, we started to panic. We had heard all the horror stories about GHS – the overcrowding, the low test scores, the kids from troubled homes, the gangs, the fights.

So we did what many of our friends were doing: we started looking at private schools. We read the brochures, took the open house tours, and applied our son to Harvard-Westlake, Pasadena Poly and Flintridge Prep, among others. He was accepted to all three, and suddenly we were staring down the barrel of $20,000 a year in private school tuition, no matter which one we chose. That’s 80 grand for high school, even before we started thinking about paying for college. Not to mention the education of our daughter, just two years behind her brother.

Some of our friends had chosen a third route: They moved to Montrose or La Crescenta to get their kids into C-V High School. For reasons too numerous to go into here, that was not a practical option for us.

We were a two-income household, but working in newspapers and higher education, we could just barely afford to live in Verdugo-Woodlands, but probably not also send our kids to private school. Even with an offer of assistance from my Mom, we were facing a crushing financial burden.

Then fate intervened. In the spring on 2006, I was offered a transfer by my employer to Washington, D.C. It seemed the perfect solution on so many levels: a dream job for me, a chance to return home to the East Coast and be near my family, and some of the best public schools in the nation for our kids.

We settled in suburban Fairfax County, Virginia, and were amazed by the quality of the schools and the money invested in public education. (If California’s public schools were funded and operated like Fairfax County’s, Glendale would have five high schools, not three, with two new ones built in the last 20 years.) Yes, the property taxes were astronomical – no Proposition 13 in Virginia – but still a bargain compared to private school tuition. Bullet dodged.

Then came The Crash of 2008. Long story short: we ended up back in Glendale, both unemployed, no money for private schools, and two teenagers insisting on being reunited with their V-W and Wilson friends at Glendale High. Despite some residual misgivings, we relented, with the proviso that they would take mostly AP and Honors classes and focus on college prep.

My first impressions of GHS were not good. It was during our first Open House, in September 2008. With its windowless façade and high security fences with iron bars, the place looked like a penitentiary. Just getting on campus as a parent felt like visiting your kid in jail. Inside the gates, a sea of concrete and asphalt, it was not exactly clean. The physical plant was obviously stressed from overcrowding and underfunding. I made disparaging comments–which I now regret–about GHS in front of my kids, lamenting what we had left behind in Virginia.

But over time, I came to realize that many of the negative stereotypes about GHS were just that, stereotypes. Gangs? Fights? A myth. Drugs? Practically non-existent. Academics? Yes, some teachers seemed to be just going through the motions, but many others were terrific. Some would even call us at home if our kids had missed a few days of school or were behind in their homework assignments. (Special shout-outs to Holly Ciotti and Amy Rangel, who made lasting impressions on us and our kids.)

The AP and Honors classes were especially challenging. My kids were surprised how hard they had to work. Coming from Fairfax County, where the school curriculum is a full year ahead of Glendale’s, they thought GHS would be a breeze. Wrong. They both have struggled mightily at times with the workload.

Much is made about the ethnic Balkanization at GHS. But that, too, is exaggerated. In the big center courtyard during breaks, it’s true that many kids tend to cluster with their cultural groups – the Mexicans over here, the Armenians over there, the Anglos over that way, etc. But teenagers tend to form cliques no matter where they go to school. In my high school in the ‘70s, there was zero ethnic diversity, but we split up into the jocks and stoners and nerds.

My son’s circle of friends at GHS included kids with Anglo, Japanese, Iranian, Armenian, Filipino, Indian and Mexican backgrounds. It’s a similar mix with my daughter’s group. To them, ethnicity is no big deal, just another trait like being tall, short, male or female. Having grown up in the Southern California melting pot, our kids thought the white-bread suburban scene in Virginia was a little weird and unnatural.

Three years on from that first Open House, our son is a proud graduate of GHS and starting his sophomore year at a major West Coast university. Our daughter is a senior at GHS, a strong student who has her sights set on UC next year. Despite my initial misgivings about GHS, both of our kids have turned out beautifully. They made good choices, made friends with other good kids, stayed out of trouble, and are well on their ways to college and adulthood.

I don’t want to sugarcoat it. Glendale High has problems. It’s woefully underfunded and overcrowded. And at times it seems like it’s being run by airport security guards from the TSA.

I am also aware that my change of heart about GHS could be perceived as simply a matter of lowered expectations, of learning to accept what we ended up with and not dwell on what could have been. But I don’t think so. The truth is GHS exceeded expectations because it really is better than people think. F or me, it’s been a lesson in perception vs. reality, and the importance of giving people and institutions a chance to prove themselves.

I am not trying to promote Glendale High, or influence other parents’ decisions. We are almost done with our GHS years, so I have no personal stake in how the school fares going forward, or what school choices other parents make. And if not for the turn of events, we might have followed the private schools path as many of our friends did. But we didn’t, and things have turned out fine.

That’s my Glendale schools story. What’s yours?





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