Walnut Creek, California, where I live, is considered to be an affluent American suburb. (FYI: the median housing price is $537,000, down 10 percent from the year before but more than twice the national average of $203,100.) Meanwhile, I read in my local newspapers that the regions most affected by the foreclosure/subprime mortgage crisis lie outside communities like mine. We’re immune, we like to think, those of us who live in Walnut Creek and neighboring affluent enclaves.
We feel bad for those sad, affected regions, "Those poor fools!" we proclaim. These regions include towns or neighborhoods that have always had lower home prices, because they had traditionally less desirable neighborhoods (like areas of Oakland or Richmond, California), or because they boasted newly constructed, but somewhat more affordable housing, including mini mansions, located in outlying, exurban areas (the kind that require 90-minute, one-way commutes).
Yes, to some extent, it’s true what the newspapers say: the hardest hit areas continue to be these more obviously distressed areas. However, I did some research of my own, through databases provided by the San Francisco Chronicle, Dataquick.com, and Foreclosure.com. Oh, watch out! Foreclosure.com is dangerously alluring. Find out, to the street, where houses in your hometown are facing foreclosure, pre-foreclosure (as in, property owners sent default notices), bankruptcies, and tax liens.
And watch out some more! These databases show that homeowners in affluent suburbs, who tried to buy their million-plus homes and join the ranks of America’s glorious, privileged class, are also struggling—with foreclosure, default notices, bankruptcies and tax liens. It’s just not the striving, less educated minorities depicted in countless news stories. It is people with the income or moxie to think that they could afford, and even deserve, to live in homes valued at $1 million or more.
Par example: Alamo, California, a small, pricey enclave of at least 15,000 people. According to Foreclosure.com, eight homeowners with million-dollar-plus homes were in active foreclosure by the end of October (a roughly 600 percent increase from the year before). So far, 16 more have been sent default notices.
In the 94506 zip code of Danville, California, another pleasant suburb of 40,000 people, anywhere from 12 to 17 homeowners are facing foreclosure. The number 12 represents a 1,100 percent increase from the year before.
Sure 17 homeowners in one zip code is nothing compared to the 117 or 420 in other much harder hit towns within 10, 20 miles of where I live. Then again, people in towns like Alamo and Danville aren’t supposed to be afflicted with these sorts of common money worries. Or so they thought. “What,” these people in Alamo and Danville say, “I can’t afford to live in a 4 bedroom, 3 ½ bath, $1.million home, with a pool? What’s wrong with the world? I’m entitled to those four bathrooms, the vaulted ceilings, and the pool. I’ve worked hard, or I’ve worked smart. Or so I thought. I can’t have a home that makes me and my family feel like we’ve acquired our piece of the upwardly mobile American dream?”
I’m sorry to sound judgmental, because, God knows, I’ve made my own share of questionable life choices, including in terms of personal financial management. I’ve also found myself feeling inadequate because—I don’t know—I haven’t spent thousands, or taken out a second mortgage, to get my kitchen remodeled so that it displays the most stylishly correct stainless steel Viking ranges and wine cellars.
Then again, I read the extent to which people in my privileged suburb and other nearby privileged suburbs extended themselves so much that they are losing their homes. What are they saying to the kids they must uproot from their schools? What must are they saying to themselves? What dreams did they pursue that have now crashed against the rocks? What new reality must these people face?
Overall, the number of foreclosures in what are considered the more affluent suburbs of San Francisco’s East Bay have increased by at least triple digits between the third quarters of 2008 and 2007, according to the San Francisco Chronicle. This is the most recent data available. Don't know about you, or the local newspapers, but I would definitely say that my friends and neighbors are being hurt by the foreclosure crisis and the global economic crisis and every other crisis you want to throw their (our) way.
That's the way it is, in our era of GEC and TNU. That is Global Economic Crisis and The New Uncertainty. (For a more detailed explanation of both these concepts, refer to my earlier Crazy in Suburbia blog, Diagnosis: GEC and TNU.)