Million Dollar Neighborhoods

The $1.38 million house on Windsong Terrace awaits its new owners in its million dollar neighborhood

Behind million dollar houses are priceless stories, experiences, and homes

Yasmeen Abed

Staff Writer

Prologue:

    As home buyers indulge in the exciting experience of either purchasing a first home, a new abode in a new city, or finally moving out of the comfort of their parents’ homes, they are most likely to be soured by the limited options in the million dollar homes that line the sidewalks in Fremont’s neighborhoods. Whether this is a problem or not (or just a rich opportunity to make a life-long investment) the price tag on these otherwise ordinary homes seems to have caught everyone’s attention.

Act 1 - Million Dollar Neighborhoods

Though not all listed, many big and small cities in the Bay Area continue to reign in the million dollar price range

Act 1: Okay, define ‘crisis’

    What do you think of when you hear the word ‘crisis’?

    Certain things are obvious, while others are still murky. For instance, it’s obvious that Fremont homes have never reached these current astronomical prices. But how do we know if it’s a ‘crisis’ or just a standard shift in the housing market?

    Ms. Hammerson, head of the Social Sciences department here at AHS, explains that “It’s simple economics: there’s a low supply and a high demand which has made Bay Area housing prices astronomical.”

    Simple supply and demand–so does this classify the current market as a ‘crisis’?

    “Oh, it’s a huge problem,” Ms. Hammerson continued. “We are currently facing a teacher crisis because teachers cannot afford to live in the Bay Area. That has become a serious issue when we’re trying to hire teachers.”

    Speaking for herself as a department head sharing the responsibility for employing potential staff, she’s had first-hand experience with the high cost of living driving teachers away.

    “They can’t afford to live here on their salaries,” she said. “…imagine that, in order to be able to buy a home in this neighborhood, you have to have a household income of over $200,000 to afford a million dollar home. The average teacher makes $50,000. So they cannot afford to live here,” she explained. “And now they can’t even afford to rent because the pressure on the housing market has driven up rental prices because there isn’t enough housing. So [the teachers] can’t even afford to rent here, so they’re leaving teaching. They’re going into other private industries.”

    So yes, the housing market is somewhat of a crisis to teachers and Bay Area natives, but real estate agents in the area seem to analyze the situation differently. Jake Furagganan, a member of the Skye Real Estate group who is still fairly new to the world of real estate compares and contrasts the atmosphere of the housing market from when he initiated his career just two years ago.

    “The market was a lot slower. It was a lot slower than it is now. And so after the surge of people coming into work in the tech industries, people have been coming in for the past 7 to 8 years looking at this area,” explained Furagganan.  “They’re looking at the schools–the schools are great. Second thing, a lot of people like the quiet neighborhood. So it’s changed a lot. I actually grew up around the corner, around 20 years ago, and it wasn’t like this.”

    So the demand for housing is high, but why Fremont specifically?

    “I get the question a lot: Why doesn’t someone just move to Vallejo or Tracy?” revealed Furagganan. “The jobs aren’t there, they’re here. What people like is all relative. They love the schools, but they need it to be convenient for work, too. So they all go hand-in-hand. Here you can get both, and that’s where the value comes in. If you have somewhere where you’re close to work, and your kid gets to go to one of the best schools, then you can pay $1 million for that, and that’s when they take a self-inventory and say maybe $3000 or $4000 a month doesn’t look so bad anymore. ‘My kids get to go here and it takes me 30 minutes to get to work’.”

Act 2 - Million Dollar Neighborhoods

Flash to the past–then-toddler Ms. Nauss (right) walks alongside her mother (left) at the Centerville baseball field

Act 2: There’s No Place Like Home

    Having moved to Kansas to attend Rockhurst University after graduating from Washington High School in 2008 and working at a private school afterward, AHS’s current U.S. History and AP Government teacher Ms. Nauss found herself in a land far away from her childhood home in Fremont, California.

    “I moved to Kansas because I liked the ‘less compacted lifestyle’ and it gave me an opportunity to play volleyball in college. The bigger reason was that both my dad and mom’s family both are from the Kansas City area and I wanted to spend more time with them,” shared Ms. Nauss. “Later when I started teaching I thought I would stay to help be able to find a house that wouldn’t cost as much.”

    Having worked at Corpus Christi Catholic School, Ms. Nauss gained over two years of experience teaching middle schoolers social studies. While teaching pre-pubescent teenagers about geography and the constitution, Ms. Nauss faced even greater challenges with her own income.

    “Even living in Kansas with a lower standard of living comparatively to California, I was living near the poverty line in standards of the amount of money I was making in Kansas,” shared Ms. Nauss. “I think there was a point where I’d just bring in cereal for lunch because I was broke, and I needed to eat. But my students thought it was pretty funny and we kind of joked about it, but [my financial circumstance] was one of the reasons I ultimately ended up moving back to Fremont.”

    However, upon returning to her home here in California, she had had her expectations built on her upbringing before all of the recent construction and housing market boom.

    “I mean Fremont has grown. When I was in high school Chili’s was our fancy restaurant. I mean like Chili’s was considered fancy…” she explained.

     Though everyone has their different preferences for high dining, it is obvious that Fremont has grown in more ways than one.

     “Fremont has grown in general from the businesses we attract here to almost having a baseball team to now growing too big to support population because now we’ve stopped building houses. A lot of real estate when I was growing up was houses; it wasn’t apartments,” shared Ms. Nauss. “Just behind the Carl’s Jr., there used to be all business, and now it is condominiums. You think of down off of Central Avenue, those are all apartments that have always existed, but now we are adding more and more especially to the American High School area.”

    Despite all of the changes, one thing remained the same for Ms. Nauss. The reliability in having her parents’ welcoming home to crash while she worked to build the foundation for her new independent life. However long that takes in this competitive market.

    “I can’t afford to live here. I was living with my parents,” she shared. “I had friends who are living over in apartments near Lake Elizabeth, but it didn’t make any sense financially for me to even try to find a roommate. I might as well live for free at my parents house that’s close by. But not everybody has that same opportunity.

    Her housing ventures continued as Ms. Nauss found herself to make it through troubling times, living in a single family home with three other roommates 20 miles away from her former abode.

    “When I was approached by friends that lived in San Jose to move into a house that was owned by one of my roommates’ parents. And so they cut us a deal on that house, living with four other people up until two months ago it’s just the reality as people move out, that rent will get higher and higher.”

    While everyone else in the Bay Area continues to drown in rising rents and high housing prices, Ms. Nauss contemplates her allegiance to the district she grew up in.

    “I think there are a lot of teachers that go back and teach in the district where they grew up in. Most of my friends that are teachers are people who have grown up in Fremont unified. it is a sentimental thing but, it comes down to where do your parents live? They live here for the most part until you come back and live with your parents for a year or two to get on your feet and then try to find something on your own once you’ve built something up. When I think of the teachers that I know that work here in Fremont, I would say at least 50% of them grew up in Fremont Unified, and so we owe our allegiance to that but that allegiance only goes so far when you can’t afford to pay rent.”

Act 3: Who are we pointing the finger at?

    Yes, the housing market is more competitive. Yes, houses have doubled in price. Yes, cities grow. The public is always going to want to find the scapegoat to blame for an increase in the cost of living in the Bay Area, but in this case, there are a bunch of different fingers pointing in all kinds of directions.

    The biggest question: Are any of the fingers pointing in the right direction?

    In a poll conducted by the Bay Area News Group, 48% of people pointed the blame finger at the tech companies in the area for causing the Bay Area housing shortage.

    Almost half of everyone polled came to the conclusion that to some extent, the major developing tech companies infringing on Fremont’s otherwise ordinary suburbia is to blame for the million dollar homes that are popping up on every available plot of land.

    “It was back in the late 80’s and 90’s when all of the excitement began,” shared AHS’s current Calculus and Honors PreCalculus teacher Mr. Takacs.

    Witnessing the birth and upbringing of the Silicon Valley, Mr. Takacs has gotten his hands dirty being amongst the original technical engineers who were originally attracted to the Silicon Valley and the opportunities it had dawned at the time.

    “I was right in the middle of it. I grew through it. I’m not a multi-multi millionaire, but I’m okay because I was in on that wave,” shared Mr. Takacs.

    Now, the craze of the tech industry so close to home seems to hit close to home for him as his sons are left in the aftermath of all of the jacked up prices and costs of living in the Silicon Valley.

    “I mean you’ve got people like one of my sons, who does not work in the tech sector. He’s a service man and he’s rooming with three other people, so there’s four of them in a house,” Mr. Takacs explained. “And then I’ve got my other son who is an engineer… in a great place up in San Francisco, and he makes a lot more money than my younger son. So of course the [tech industry] is going to drive the prices up. That’s going to affect your rents, that’s going to affect your houses, and so I would have to say that engineering has made a major impact.”

    Though the Silicon Valley’s responsibility in the highly-priced housing market is significant, experienced real estate agents in the Bay Area seem to have noted an alternate cause for the increase in living costs.

     “It is a very hot, very competitive market,” shared real estate agent Raman Singh.

      Singh carries over a decade of experience currently working with Skye Real Estate with Fremont, the Bay Area and the Central Valley housing markets. With this experience, Raman has seen it all.

    “Multiple offers, with 25% over asking price,” explained Singh. “When I first started, it was in 2004. It was a similar atmosphere where we got multiple offers, and aggressive buyers, but at that time I believe the loans were different where people were coming in with 0% down payment.”

    She continued to explain the shifts in the trends in her experience as all of the past events all come full circle and contribute to what the housing market is today.

     “We notice that the banks have become very strict in lending out loans so we see a lot of people coming in with cash and very strong down payments, we have very strong buyers buying today. Whereas in 2005, the buyers were not as strong. But in the sense now we have all of these great companies, IT companies like Facebook and Google these are people that are buying, and they have the cash.”

         Despite its high and daunting housing prices, it seems that real estate agents seem to still find Fremont most attractive for their clients.

    “Fremont is centrally located, whether you work up in San Francisco, or down south in San Jose,” shared Singh. “One thing I tell a lot of my first home buyers is that one thing that you can’t change about a home is its location. You can change the condition, you can change all that but you can never change location. So it’s all about location, location, location. If you find a home in a place where it’s best for you and even if you’re going to have to be competitive to get that home,  go for it.”

    Singh’s colleague seems to have a similar mindset in urging their clients to weigh the opportunity costs in this simple economic decision.

    “Sometimes I’ll have clients where they’ll say, ‘I don’t want to pay $1 million to live here in Fremont, I’d rather pay $600,000 and live in Tracy and while I work in Mountain View,’” shared  Jake Furagganan. “So I tell them, ‘No. You don’t want to do that.’ Have you ever driven across the Altamont pass before? During traffic? It may seem like a good idea, but it’s going to take you 2 hours to get home, or more. And then multiply that for everyday.”

    In the case for AHS, teachers are required to make that same self-reflection in questioning whether the long hours in traffic are worth escaping the million dollar neighborhoods their schools reside in.

    “It is a problem: the people can’t afford it, the commutes are getting worse, and they look for alternatives, which is very economic. In my commute on back to school night, I can make it from here to my house in a half an hour. But every five minutes you add after three o’clock, adds fifteen minutes to my commute,” complained long-time teacher Ms. Hammerson. “On most days it takes me almost an hour to get home, and on Fridays, almost two hours. So is it worth it for me? Probably not. I think I’ll probably be one of those people leaving teaching in the next couple of years.”

 

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