When America’s real estate bubble burst in 2007, lots of people got soaked. Some are still underwater.
Bubbles, either soap or real estate, are shimmering, fragile things. After they burst, we forget their details, but Sunday, I found a detail from the 2007 real estate bubble. It’s an advertising flier that was buried in a kitchen drawer.
We’d received the flier in 2007. It contained a list of houses sold in 2006 in our neighborhood in Paso Robles. One house was on the next block from us. It was built shortly before 1980 by the same developer that built our house. The flier said it was sold in 2006 for $427,500.
No wonder I saved that flier. It made me feel rich. That house has three bedrooms. Ours has four and probably would have sold for more.
Later, I noticed that last Sunday’s Tribune mentioned another house on that same street, about a block from the one sold in 2006. This second house appeared on The Tribune’s weekly list of recent real estate transactions. It was sold sometime between May 24 and 29 for $290,000.
What a difference six years make. The first house, with three bedrooms, sold in 2006 for $427,500.
The second house, which had been expanded with a significant addition, sold this past May for $290,000.
The larger house sold this year for 32 percent less than the smaller house fetched six years ago. Have house prices dropped that much citywide? Could that mean Paso Robles has lost almost one-third of its residential real estate wealth? Maybe not, but anybody who bought a house in
Paso Robles in 2006 probably has.
But please remember my ignorance of real estate pricing is astonishing. All I really know is that in 1962, Mamie and I bought a house in the Sherwood Acres section of Paso Robles for $10,500 and sold it in 1982 for $60,000. Then we bought a house for $91,000, which we still live in. I hope it could sell for $250,000, but it’s not for sale.
You’ve undoubtedly noticed that the cost of almost everything has soared as much as real estate has, or more. You’ve probably heard people my age reminiscing about buying 3 pounds of hamburger for a dollar, a gallon of gas for 20 cents and soda pop for a nickel.