This week, my husband, the builder, had an unusual opportunity. While he was waiting in a lawyer’s office in Massachusetts to buy a piece of property the lawyer told him about a property for sale in Vermont. It was an unusual story…
John, a client, inherited a historic brick house in a small village in Vermont. He had never seen the house, but he put it on the market for $300,000. He expected a quick turnover and a handsome check. But the house sat and sat. John lowered the price again and again, but the house still sat. After several years, when the house hadn’t sold for $189,000, John gave it to his church in Massachusetts as a tax deductible donation. Church officials had no idea what to do with a house.
In Vermont, Peter, a local builder, contacted the church and offered to buy the house for $62,000. Ridiculous! A five-bedroom brick house, for $62,000. No one from the church had ever seen the house either. The church turned the house’s fate over to their lawyers and that is when my husband got involved.
We went to the house this weekend when he was in Vermont. He thought it was a great opportunity to turn a quick profit. The exterior was cute. The town was quaint and the interior shots weren’t scary.
But when we went inside…let’s just say the house was one of those hundred-year-old houses that had had all the charm renovated right out of it and left a mess behind. Could it be fixed? Of course, but not with a quick cosmetic fix. My husband called the lawyer back and told him to take the offer for $62,000.
Why would a house like that not be snapped up by a young couple just starting out? When we bought our first house it was no prize. Back when this house was listed for $189,000, it would have had a mortgage payment of only $959. That’s less than rent!
My husband—former accountant, now builder—explained. The mortgage payment would be okay, a buyer might have the downpayment, but the renovations would be overwhelming and probably double the cost of the house, which is why a builder/flipper isn’t interested unless they can steal it. Once the rehab is done the house will sell for top dollar and no longer be affordable for buyers just starting out.
We need workforce housing everywhere. That is housing that is affordable for households where earned income isn’t enough to secure quality housing locally. But when an affordable house does come on the market it often can’t be bought by the people who need it most. What a dilemma!