FIRST OF A FIVE PART SERIES

Lynn Compas is a young professional, the sort of person that realtors like to work with. She’s got a master’s degree, she has a steady job with Pacific Gas and Electric, and she’s been careful to live within her means. So a few months ago, when she decided that it was time to buy a place to live, she entered the market with a number of expectations, starting with two bedrooms.  “I wanted a house, not a condo," she says. "And in a decent area, hopefully East Sacramento. But that dream was squelched.”

Compas found herself looking at homes priced at $300,000 and up, which was much more than she could afford on a single salary.
“So I started looking elsewhere. But I found that my price range was around $200 to $250, and I was finding that most houses in that market are fixer uppers,” says Compas.

Compas had come right up against a choice that faces most first time buyers, in Sacramento and elsewhere in California. The house they expected to be able to buy will cost them more than they can prudently afford. The median home price in Sacramento County is $330,000. But if you’re looking at a community like Davis, or El Dorado Hills, the median home price is more like $530 or $550,000. It’s a situation that Professor Rob Wassmer of Sacramento State University, author of several papers on home prices, has studied for years. “Most experts say you shouldn’t spend more than 28 or 30 percent of your income on a house,"says Wassmer. "And if the housing prices are up high, and your income isn’t matching that, you might have to sacrifice a bit in size, and maybe even think about a condominium.”

Which is exactly what our first-time home-buyer, Lynn Compas, did. And right away, she found herself in a fast-moving market where there are a lot of buyers going after a limited number of condominiums, priced from $160,000 to $260,000. “It’s very competitive. I would find a condominium that I liked, and I would want, of course, to think about making an offer on it it overnight, and I would go back the next day, and there were like, three offers on it overnight.”

So Compas got her financing in order. Prospective home buyers have many more options available to them than buyers in decades past, including loans that involve no down payment, or cover interest payments only. Compas shopped with three different companies, comparing different packages before selecting a no down payment mortgage that suited her needs. Then she made an offer on a one-bedroom, one-bath condo in the Fair Oaks area. It’s a bit smaller and further from work than she’d originally envisioned – but it’s something she can realistically afford. She toured a model last week, making her final choices in terms of flooring and appliances.

Compas won’t move in until June or July. But in today’s escalating market, she says her condo is already appreciating in value. “Within a week of my putting down money to reserve one, they went up $4,000 with the next phase that they released. Which was a good thing for me, because it raises the value of the one I have my money down on.”

And what about that dream that she started with? It’s still there.
“At some point, I’d still like to be in a two bedroom house, a regular house with a yard, "says Compas. "But, we’ll just have to see what the housing market does.”