Nearly a decade after the collapse of the housing bubble, I'm still feeling the consequences.
Illustration by Theresa Chromati
At the age of 24, making $35,000 a year working as an editorial aide at a newspaper, I bought some real estate: a 770-square-foot, one-bedroom condo in northern Virginia. This was in 2006, when the housing bubble was at its most distended. It was basically the worst time to buy a piece of real estate—especially in the DC area, where inflated prices are the norm in any market condition. I avoided a subprime loan because I had the backing of my middle-class parents, but this was still a terrible, terrible decision.
Eleven years later, I'm stuck in debt, besieged by bank fees and unable to get myself out of what has become a life-altering real estate clusterfuck. Even as the country recovers from the crash of 2008, the financial crisis is still dragging me down.
Looking back, it's easy for strangers to armchair quarterback my path to financial ruin. I obviously wasn't making enough on my own to afford the place, and my career choice, print journalism, has never been known for its robust earning potential. And this was at a time when newspaper jobs were decreasing, and digital media jobs were still few in number.
Nevertheless, my parents pressed me on the idea of home ownership. I told them I had heard there might be a housing bubble. They brushed it off. I worried what would happen if I suddenly had to move to another city for work, a very real possibility for someone starting out in newspapers. They told me if I didn't buy then, there was a good chance I'd never be a homeowner. I'm not sure that warning would bother me now, but it spooked me then. Bottom line, I was a 24-year-old being gifted with what seemed like a great opportunity. My parents were going to help me buy a home. Why say no to that?
I was not what one would call financially disciplined back then—perhaps yet another reason why it wasn't such a great idea to buy a condo—but I figured if my parents, who both had government jobs dealing in finance and had worked in banking before that, were confident, it would work out. This was also an era when some people were making small fortunes flipping houses. I figured I could live in this place for a few years, move if I had to, and maybe come away with a little extra money.
I was wrong: Today I'm still living in the condo, but just barely hanging on. I can't sell the place. Mine is one of about 5.5 million, or nearly 10 percent of all US mortgages, that are currently underwater, meaning I owe more than the property is worth.
I'm struggling to stay afloat and taking on a punishing work schedule in a desperate attempt to stick it out and avoid foreclosure. The equity I've built is closing in on the point where it might cover the value the property lost in the crash. That's being optimistic. Even after more than a decade forking over interest on a mortgage, the idea of simply breaking even—getting away from this condo with nothing to show for it—sounds like a dream. But I'm worried I won't make it to that point, much less ever get close to owning the place outright.
I recognize the privilege I had getting this chance, even as it's backfired on me. While no down payment was required to buy the place, my parents did put down a $5,000 deposit that they recouped at closing. That's not something a lot of 24-year-olds are able to do on their own. My parents also chipped in early with bills, with the expectation that I would take over completely within a few years. By 2008, it seemed like a sound strategy even as the crash decimated the property's value, lowering it by roughly a third. I had a great year, making six figures thanks in part to an advance on my first book. Sadly, there was eventually an ebb to that flow.
I left a full-time editing job in 2015. I knew I was taking a risk trying to cover a monthly mortgage payment, among other bills, with income from freelance writing. Initially, I was making as much freelancing as I was at my prior job. Often, however, the glacial speed with which publications pay freelancers meant bills would come due before checks arrived, and I'd get dinged with $35 overdraft fees from my bank. The fees kept accruing, keeping me from saving any money even as I was ostensibly making enough to squirrel funds away. Then my freelance work started drying up early in 2017.
I needed work that could pay me regularly enough to deal with monthly expenses. So for the past six months, I've worked two part-time jobs while trying to fit in paid writing assignments where I can. In one stretch this summer, I worked 60 days in a row. That was sufficient to cover exactly what I owe in bills each month. For food and day-to-day expenses, I've essentially been living off the tips I receive at one of my jobs. The problem is, unexpected needs here and there, along with the bank hitting me with hundreds in fees, have knocked me off schedule. I'm falling behind on payments. Barring a surprise job offer that would magically spur my earnings, I don't know how I'm going to make this work. My parents are now retired and on a fixed income. Even if I wanted to turn to them for help, and I don't, I'm not sure they could provide it.
I would be fine with foreclosure, even though that would wreck my credit, simply to move on and extricate myself from this mess—but because my parents are also tied up in the purchase, bankruptcy or foreclosure would harm them as well. So with no ability to relocate for better work or lower monthly bills, I press on, at least for now.
I take responsibility for the state of my career. I'm more than willing to admit I'm living beyond my means, except I can't do anything about it. What enrages me is putting more than a decade worth of payments into a home and still not having enough equity to be able to get out. I honestly would have been better off renting. I've had to sheepishly seek help from friends, ask Twitter followers to donate whatever they were willing, and beg a bank manager to partially release a hold placed on one of my paychecks. It's embarrassing. My annual income doesn't qualify me for poverty status, but I would imagine the constant financial stress is similar.
A recommendation I often receive from friends is to rent my place, since the rental market in DC has climbed to absurd heights. The problem with that is twofold: The amount I could rent my condo still doesn't come close to covering my monthly payment, and to even be able to rent it out at market value, I would need to replace the carpet, repaint the walls, and get a new air-conditioning unit after the current one gave out this summer. None of those things I can afford to do right now.
Earlier this year, one of the endless array of reductive takes about millennials made the rounds online, this one regarding my generation's tendency to eschew home ownership. The reasoning, put forth by some Australian millionaire I'd never heard of and hopefully never will again, was that millennials spend too much on frivolous things like avocado toast and fancy coffee instead of saving toward a down payment on a home. In no time at all, people pointed out the flaws in this argument: Experts say millennials are actually more frugal than boomers in their spending habits. It also doesn't help that since the crash, home builders have concentrated on high-end properties, and not the sort of starter homes young first-timers could afford.
But my experience suggests another reason millennials don't buy homes. Maybe they just know what they're doing.
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