Before the Housing Bubble: Work at Starbucks, Buy a House

While there will be a lot of pain associated with the bursting of the housing bubble for many people, I also believe there will be something positive as well.

Remember when buying a house was a possibility for many people? Remember when it was actually affordable?

I was reminded of that when I read this excellent NY Times article called “A Refugee From Gangland.”

In it, Margaret B. Jones discusses how her life had changed since she grew up in the gangs of South Central L.A. and had moved to Eugene, Oregon.

“Shoot, I’m happy,” said Ms. Jones, 33, a single mother who spent her youth as a foster child and gang member. She was dealing drugs on the streets of South Central Los Angeles before she hit puberty. “I’m making do. At least I’m not in three rooms anymore.”

Instead, she owns a four-bedroom 1940s bungalow near her alma mater — a university where she “learned big words for stuff I already knew,” she said — and has just written a book, “Love and Consequences” (Riverhead Books), a heart-wrenching memoir that was released this week.

She actually bought the house before she ever got the book contract. Here it is:

After she graduated from college and had a daughter, she then worked at Starbucks. You wouldn’t think working at Starbucks would give you much money in which to buy a house, right?

In 2000, while working at a Starbucks, Ms. Jones bought her four-bedroom house in the Whiteaker neighborhood, considered the ghetto of Eugene, she said. “But it’s the nicest place I’ve ever lived. This little ’hood is safe. Schools are great. The neighbor kids come over to play, Mexican and white. I feel cool — I walk my dogs at two in the morning down to the river.”

I had to think back to 2000 and what was going on in the housing market then. Some areas were already heating up, specifically California during the dot-com boom. But apparently Eugene was pretty quiet. At least in the “non-desirable” neighborhoods.

“It was different for me because I’m up here where you can buy a house for $130,000, with a 3 percent down payment.” She came up with her down payment by cashing in Starbucks stock options, she said.

Remember when houses cost $130,000- even if they were in the “ghetto”?

A house in South Central today, even with the declines, is well over $300,000 (and probably well over $400,000.)

Houses in West Oakland, not considered the safest area of Oakland by any means, were selling for over $400,000 just a year ago.

This young woman worked at a coffee shop, got some stock options (because Starbucks actually DOES reward its employees with both stock options AND health insurance if you work more than 20 hours a week) and then bought a house.

When will be seeing that again?

It will happen. The market will return to the mean.

I was just struck by how she bought her house and what it means to her now.

It’ll be kinda nice when we get back to those simpler times, don’t you think? Then we can all work “normal” jobs and still have the American Dream.