I didn’t mean to buy a house. It just happened.
That may sound ridiculous, but it’s true. I used to think buying a house was something you did when you got married. Until then, you’re supposed to live in an apartment or share a place with your buddies.
And that’s what I was doing a couple of years ago, when I was writing monthly rent checks as I had done since college. Except I tentatively began looking at houses for sale, spurred by a constant chorus singing the praises of “equity building,” a concept that I never took the time to fully understand.
I went through the motions, reading the real estate section during my Sunday morning coffee, driving around to open houses in my spare time, and eventually going around with a real estate agent. But all the while, I never actually thought I would go through with it.
And then it happened. I saw a house that was just about perfect. I could actually afford it. In fact, the monthly mortgage payment wouldn’t be much more than my rent. There was absolutely no reason not to buy it. In fact, it would have been foolish not to buy it.
With all of my preconceptions shaken to the core, I got to thinking. If a young, single, commitment-phobe like me ended up buying a house practically against his will, is anyone safe?
As it turns out, I’m not alone in being home alone. A series of economic and demographic factors have combined in recent years to create the perfect storm of home buying among otherwise innocent and well-meaning single young people.
First of all, interest rates have been extremely low, making loans of all kinds unusually affordable. The low interest rates also made real estate a more attractive investment, especially for young people who typically cannot afford high-yield financial vehicles. (That’s the equity thing everybody was talking about.)
Add to that the mortgage interest tax deduction and other programs for first-time home buyers, as well as the introduction of mortgages that require a minimal down payment — or no down payment — and suddenly a young person doesn’t have to spend years saving cash to qualify for a home loan.
With that kind of incentive to make the big purchase, waiting until marriage is a bigger challenge, even before factoring in that young people are getting married later in life. According to the U.S. Census Bureau, since 1970 the average age for a first wedding rose from 25.3 to 27.1 among men and from 20.8 to 23.2 among women. Furthermore, the percentages of both men and women age 30-34 who have never been married have quadrupled during that time.
The biggest change lately has been among single women, who set a record in 2005 for both their number and share of national home purchases. Statistics provided by the National Association of Realtors show that 1.76 million single women bought homes in 2005, which was a 22 percent increase over the previous year. They accounted for 21 percent of all adult homebuyers in 2005, up from 14 percent in 1995 (which is not even a fair comparison, because the overall sales volume back then was far smaller). Over the same 10-year period, the portion of married couples buying homes fell from 70 percent to 61 percent, and single men remained at 9 percent.
In fact, the percentage of single men buying homes has stayed fairly steady for as long as the data has been tracked.
“It is a curiosity that [single] women have always purchased homes more than [single] men,” said Walter Molony, a spokesman for the National Association of Realtors. “The survey data doesn’t answer why. Some of it may be social and cultural trends, although it could be more historic. Back in the hunter-gatherer days, men were out hunting and the hut, tent, cave were more the women’s domain. You see that when couples buy houses. Probably more often than not, women are a more equal partner in that process. In reality, the home is more hers, which may help to explain why they purchase at more than double the rate of single men. Most men don’t get serious about real estate until they meet the right woman.”
Even if that’s true, the high rate of home purchases among single women is a relatively new phenomenon in Arkansas, as Janet Jones has observed.
“A lot of young women are buying homes, many more than when I started in this business, for several reasons,” said Jones, who has worked in the Little Rock real estate market since 1974 and founded the Janet Jones Company in 1980. “One, young women are marrying later. There are more career women now then when I started selling real estate. In 1974, there were not very many women lawyers or doctors or investment brokers or company owners. At that time, most women were focused on a home with a husband and children.”
And as Molony points out, 30 years ago a single woman probably couldn’t buy a home even if she wanted to.
“If you go back to the 1970s, single women had no market share,” he said. “It was very difficult for single women to get credit, especially a mortgage. They were not taken seriously by the lending community. As income disparities narrowed, you see women really rising.”
Take Becca Gardner, for example. On April 25, she closed on her first home purchase, in Little Rock’s Capitol View neighborhood. Twenty-eight and single, she is the director of marketing and public relations at the Arkansas Repertory Theatre.
“I had been renting since I was in college, and I had been living alone for a long, long time,” Gardner said. “In this particular situation, I had been in the same apartment in Little Rock for four-and-a-half years. No roommates, just a one-bedroom apartment. Now that I’m getting older, I don’t want to live in an apartment for the rest of my life. I want to start investing money in something I could at least have equity in.”
Gardner also had finally achieved a degree of financial stability by paying off her student loans and credit card debt. Still, despite her confidence and independence, she never expected to go through the home purchasing process before marriage.
“I really never thought I’d be buying one on my own,” she said. “It’s been a new experience. I’m used to doing things independently, but buying a home on your own is a lot different. There’s no one to do the whole process with you, and you kind of feel like you’re out there on your own. It’s kind of scary.”
That sense of fear is not preventing a growing number of young people from entering the housing market, as far as Joel Tvedten can tell.
“It seems that most of my clients are young and single,” said Tvedten, a 33-year-old Remax agent who has been in the business for two years. “I’d say the majority of them are.”
Many of his clients are young women, and he sees a generational difference in attitudes toward women buying houses without men.
“The other day, I just sold a house to an elderly woman who is trying to get her mother to move up here from Florida,” Tvedten said. “Her mother is 93 and says, ‘What are we going to do, we don’t have a man to take care of us.’ That tells you the old-fashioned thoughts. The older women typically feel they need that man to support the household, as opposed to younger females going out and being professional and taking the initiative to buy a home and take care of the maintenance. I’m really impressed with the single females I work with and how knowledgeable they are about real estate transactions and the makeup of the house.”
Tvedten says that the average home sale price for a young single person is $170,000, and that they tend to be attracted to neighborhoods like Hillcrest, because of its “trendiness,” and Capitol View/Stifft Station, because it is “up and coming.”
Janet Jones notes that many of the single, young home buyers have recently relocated to Arkansas from other states.
“We often have single people who are coming with companies or coming with medical school or law school,” Jones said. “With interest rates as good as they are, it has made very good sense to invest in a home rather than pay rent, so more and more young people coming from out of town have decided it makes better sense to invest in a property. You can live in a beautiful neighborhood with very nice houses for much less than in most cities of this size.”
Tvedten made a similar observation.
“People are amazed when they come to Little Rock and see what they can buy for $300,000 as opposed to what they can get for $300,000 on the East Coast, West Coast and bigger metropolitan areas,” Tvedten said. “For what they could get here for $300,000, they would spend $500,000 to $600,000 in Sacramento.”
Tvedten almost got the proportion exactly right. Data compiled by the National Association of Realtors in the first quarter of 2006 shows that the median price of a single-family home in Little Rock is $123,800, compared with $376,200 in Sacramento. In New York City, it is $458,500, and the highest median price was recorded in California’s Silicon Valley, where it is $746,800.
Now that it takes two incomes to buy an average home in 75 percent of America’s cities (according to Harvard Law School professor Elizabeth Warren), and young people are waiting longer before getting married, the affordability factor may be fueling the increase in home purchases among young single people in Arkansas.
“I think real estate is an exceptionally good investment in Little Rock,” said Janet Jones. “We’ve all read the latest reports in Forbes magazine and bankrate.com where it was noted that Little Rock real estate was undervalued, in some cases as much as 17 percent.”
Further attesting to Little Rock’s housing value is a Moody’s Economy.com analysis from late 2005, which found that it takes less than 13 percent of the average person’s income to purchase a typical home here. In New York, an individual would need to spend 46 percent of his or her income, and in San Francisco, it would take 52 percent.
That was what convinced Samira Zebian to buy her first home when she moved to Little Rock from New York this spring. She doesn’t have any previous ties to Arkansas, she hasn’t had time to make any close friends and she doesn’t know how long she will remain here, but that didn’t stop her from making a big investment in Little Rock real estate.
“Coming to Little Rock was like night and day as far as how far my dollars would go, the caliber of neighborhood I could live in, the amount of square footage I could afford,” said Zebian, who is the new director of sponsorship marketing for Alltel.
“I think the other thing that was striking to me when I got here was that I thought I wanted to live downtown,” she added. “I started to look at luxury high-rise buildings, and that would have been an easier transition in terms of lifestyle. But ultimately I didn’t feel that business model was proven enough yet. I didn’t think spending $400,000 to buy a condo when I could buy a house in the Heights seemed like a wise investment.”
Gardner registered a similar complaint.
“If I had my way, I would move downtown, but there is no affordable housing for young people downtown,” Gardner said. “Maybe for middle-aged professionals, but not young professionals.”
As a result, Zebian ended up buying that house in the Heights, which is one of Little Rock’s more expensive and traditional neighborhoods, and an unusual choice for a single young woman. She says that affected how she was treated during the purchasing process.
“When I arrived in Little Rock, people seemed shocked and somewhat alarmed that I would be taking that step by myself, moving to this community by myself, and I didn’t have a co-borrower,” Zebian said. “All of those folks were very surprised that I would be in this life stage buying this type of property by myself. There was certainly surprise that I could afford something in my price range in the Heights.”
Gardner says she didn’t experience any sexism before she bought her house, but that changed after she moved in.
“Now that I own a home, all of the literature I get from marketers assumes I have a husband, which I think is hilarious,” Gardner said. “Actually, it’s sort of sad that people assume that for a woman to have a house she has to have a man. I get letters that say, ‘Dear Mrs. Gardner, you and your husband, blah blah blah.’ When I called to connect my security system, they asked, ‘Is your husband going to be there?’ What about buying a house should imply that I have a husband? It’s kind of insulting on some level.”
So what goes into a bachelorette pad, anyway?
“I do see bachelorette pads, but usually they’re not too different than a family home,” Janet Jones said. “The difference is perhaps they’re smaller, or perhaps there’s a difference in the decor. Maybe there is a more sophisticated, glitzy decor.
“Single people buy the same things that people with families buy,” she added. “The main thing I might focus on if I was with a single person would be a neighborhood where other singles are buying rather than a neighborhood with children and tricycles at every house. Sometimes singles buy large homes because they have a lot of visitors and a lot of parties.”
Walter Molony of the National Association of Realtors said that 40 percent of all condominiums are purchased by single women, which he attributes to condos having more security and requiring less maintenance.
But Gardner and Zebian bought houses. Are they decorating them any differently as single women than they would if they were married?
“I’m definitely not setting up with a mind of this will be a nursery some day, if that’s what you’re asking,” Gardner said. “I have room in the back that I’m thinking of making into an entertainment room, so I can have friends over. If I had a child, I would probably turn it into a nursery. But that’s just where I am in life, and my house reflects that.”
Zebian said, “As a single person, I didn’t want to feel that the space was more than I could handle, and that’s why I gravitated to a small house.” Because she works so much, she still feels she hasn’t had time to get the interior exactly right, and now she is leaning toward hiring a decorator to take care of it.
That is one of the drawbacks of making such a big commitment alone, but Zebian says that the practical benefits outweighed her original idealized notions.
“It was becoming painfully obvious that if I was going to buy a home, it would probably have to happen on my own,” she said. “I think I would have not envisioned myself being a home buyer without having a spouse, but my definition of what I would be doing at this point in my life has changed dramatically over time. I realized there was no reason to wait to do this until I have a spouse.
“Although sometimes it hits you, like when you’re trying to hang a mirror by yourself or trying to move furniture by yourself,” she continued. “Those funny moments, when you don’t realize how by yourself you are until they come up. But you just cope.”
Gardner says that more of her single female friends are making similar steps.
“I would say it’s more common now than it was 10 or 15 years ago,” she said. “I know of people who are single girls, who have never been married, who are buying houses. I think it’s because nowadays people are waiting so long to get married, that’s a real trend. No one wants to live in the same one-bedroom apartment for the rest of their life. It shouldn’t matter what your marital status is to have the American dream.”
And what happens if she gets married? Does she move out, or does he move in?
“I’ve often thought about that,” Gardner said. “This house means so much more to me than if I bought it with someone else, because I did it on my own. It would be very hard to give it up.”