This generation was priced out of the Los Angeles housing market — and now it’s worried it’s being priced out of Bakersfield, too.
Anthony Serrato lives with his fiancée, Maggie Arci, his father, and a family friend in a three-bedroom, two-bathroom home in the San Fernando Valley, an urban valley in Los Angeles County, California. It’s his father’s house, and being in his late twenties, communal living isn’t always ideal.
Cerato’s mother died two years ago, and even before that, his family struggled to afford her mortgage. He said, “It was their dream to own this house and to buy and live here…but it was always a struggle.” luck. Cerrato would help his father out of the house, contribute to the mortgage every month and make sure there was food in the fridge — saving money while doing it. After his mother died, Serrato and his partner rented a studio in Canoga Park for $1,400 a month. But since returning home, he generally gives his father $700 to $1,000 a month for the mortgage alone.
In March this year, the California Housing Finance Agency foot The “Dream for All” program included in the state’s annual budget. Later that month, the Down Payment Assistance Program will be available to first-time homebuyers and those who qualify can get a loan of up to 20% of the home’s purchase price; (The homeowner then repays this loan amount and a percentage of any appreciation in the home’s value.) For Cerato and his partner, it was a push for them to start seriously considering buying their home. But in less than two weeks, it was Everyone’s Dream Co-Appreciation Loan. pauseoverwhelmed with orders and $500 million in financing that was cut to $300 million.
“It’s only lasted two weeks, and as we were looking at the house, our realtor was like, ‘We just got an email saying all the money is fully locked up, and there’s no more,'” Cerrato said. “It was definitely a bit of a blow to our mentality in general.”
Everyone’s Dream Program It has since been revived, with $200 million in funding remaining, though it’s not clear when they’ll start accepting applications, or how long that will last this time around. However, Cerato’s fiancée recently lost her job. Before that, their combined income was about $130,000 a year, before taxes, he says. They’re still looking for a home in Bakersfield, California, in particular, where the median home value is $340,427 versus, let’s say San Fernando, where median home value is $685,439, or Los Angeles, where median home value It is $906,524. Their price range is between $200,000 and $250,000.
On social media, Cerato Share a video Three bedroom, one bathroom home listed on Zillow – obviously worn out but listed for approximately $220,000. Serrato explained that the video was mostly a joke, and for more than $200,000 for what he called “pretty much a trap house” and “something completely ramshackle” was ridiculous. However, in his opinion, seeing that made it seem as if the market floor had been lifted.
“It was kind of like, ‘Wow, are we going to lose our price soon on a house in Bakersfield?'” Cerato said, later adding, “I’m not looking to buy for $350,000 [or] $400,000 home and be home poor – I refuse to be home poor I’ve lived all my life.”
And the market floor has been somewhat raised. In March of 2020, the beginning of the pandemic, typical Bakersfield home value, according to the Zillow, was $238,449. More than three years later, as of August 2023, the median city home value is $340,427. That’s roughly a 42.8% increase in such a short period of time, all the time Mortgage rates have doubled Since its epidemic lows which are hover above 7%.
When Cerrato started making money, after graduating from UCLA and working on his career in marketing, things started to change. Cerato says he was no longer poor at home, and they could all live comfortably and pay their bills. “Before, everything went towards the mortgage and you had to know what you were going to eat,” he said. That’s why even if he were approved for a $400,000 mortgage, he wouldn’t consider buying a home worth that much.
Cerato did not grow up in the house he lives in now. He grew up in a one-bedroom apartment, living with his mother, father, and brother. He said: “I’m used to sharing, my brother and I slept in the living room.” Cerato explained that although they did not grow up poor. They still have Xboxes, PlayStations, computers, and cars, but “we didn’t own a home,” he said. As he and his fiancée continue to search for homes in Bakersfield and the surrounding area, he learns that there are affordable homes out there that aren’t completely run down, unlike the list he shared online.
“I hate to see the market floor increase,” Cerrato said. “I just hope the houses stay the same for the next couple of months while I look for a house, I hope they stay within the range I can afford.”
Serrato said that before the program paused, he and his partner got into savings mode, and looked at monetizing whatever assets they had. Even after the program is off, they still feel home ownership is within reach, though his fiancée losing her job makes things a little more difficult. “I am willing to buy for less… until I can save myself this grief, which is why I am willing to move to Bakersfield, away from my family,” said Cerato.
At one point, he considered Palmdale, California with a median home value of $480,649, a little closer to home, but was priced out of that market since home prices had risen 31% in more than three years.
“I used to think of Palmdale as a place where I could buy a house, but now as I look, at my age when I can finally afford it, I realize I was also priced out of there,” he said. “Now I have to go a little further, so the next best stop is Bakersfield.”
However, Cerato and his fiancée are in a somewhat unique position, feeling that their earning potential could become much higher, because, after losing her job, she has begun working towards her bachelor’s degree.
“It’s like if we wait another two years, then we’ll definitely be priced in, I don’t feel it’s worth waiting any longer,” he said, adding that once they own their home, they can eventually sell if their situation changes and buy another, and that way their money goes toward The asset that is likely to go up. But something was going through his mind as he considered buying a home outside of his hometown, since that was what he and his partner could afford.
“I’m afraid the worst part about it….the people coming from it [other markets] They’re obviously starting to price people out of their city, people who know Bakersfield as home, so I kind of sympathize with that because it happened to me in my hometown,” Cerrato said.
This story originally appeared on Fortune.com
5 Side Struggles Where You Might Earn Over $20,000 A Year – All While Working From Home
Looking to earn extra cash? This CD has 5.15% APY now
Buying a home? Here’s the savings
This is how much money you need to earn annually to comfortably buy a $600,000 home