Tuesday, April 04, 2006

Housing Bubble Casualties: Professionals 'Suckered' into Oak Park

The Sacramento Bee examines the demographic shifts that have accompanied the housing boom.

On a pleasant evening in mid-March, about two dozen people gathered in the driveway of a high-water bungalow on Third Avenue in Oak Park to chat and eat birthday cake. It could have been any neighborhood get-together. But this party had a serious edge. It was a monthly vigil held to show solidarity for Beth Kivel and Kirsten Tripplett, whose house in the 3600 block of Third Avenue was firebombed Jan. 15...

During the past five years, as real estate prices soared in the region, Oak Park saw an influx of professionals such as Tripplett, a biologist, and Kivel, 45, a professor of leisure studies at California State University, Sacramento. Drawn by relatively low prices and a supply of potentially charming old homes near Sacramento's downtown, these new arrivals have brought energy and political clout to a neighborhood that has been downtrodden for decades.

About half the 11 board members of the Oak Park Neighborhood Association have lived in Oak Park less than three years, said board member Nate Solov, who moved from midtown a year and a half ago.

Real estate values have more than quadrupled in the past six years, from a median of $53,500 in 2000 to $238,500 in 2006. It's an eye-popping increase, but the neighborhood remains a bargain by Sacramento standards.

Now, brightly painted bungalows sit beside rundown homes circled with chain-link fences. New houses are rising from empty lots on nearly every street.

But drug dealing and prostitution persist, and Oak Park's violent crime rate is about twice as high as the city average. Activists complain about slumlords who do little to screen tenants and a proliferation of problem liquor stores...

By the time Bud Aungst bought his house on Y Street 13 years ago, he said, he could hear so many gunshots at night he "learned to tell the difference between a rifle and a pistol." The atmosphere has improved since then, he said.

Ron Emslie, 58, who has lived in Oak Park on and off all his life, agreed and thinks the newcomers have helped. "Before, there wasn't any money here, and if there's no money, people don't have an interest," Emslie said. "Now, even if the (newcomers) got suckered in here, which quite a few did, they have an investment - and it's not peanuts. It's a substantial amount."

For some who moved to Oak Park in the rush of the early 2000s, the reality proved worse than expected. Celeste Brown and her husband sold their 1920s bungalow on Eighth Avenue in 2003 after living there less than three years. "I'm a little jaded now," Brown said. "I put a lot of my time and effort into that neighborhood for two and a half years, and I saw very little return." "Just getting the drug dealers and prostitutes out of there is a major hurdle," she added.

8 comments:

Happy Renter said...

Wow, you mean to tell me urban reclamation is difficult?

Homeowners will flee and find their homes impossible to sell and will end up renting. Never wanting to be landlords their property will decay.

We should expect this kind of news at this phase.

Next the Sac Bee will report that the downtown Condo tower projects are being cancelled.

Rob Dawg said...

Likely to be accused; recent rain, State Budget cutbacks, levee concerns and ... whatever will be blamed.

Things that won't be blamed; crime, fail light rail system, taxes, congestion, bubble, the summer temperatures, overbuilding, whatever.

Athena said...

Yikes... What were they thinking? have a hard time feeling too bad for them... its not like they didn't see the neighborhood when they bought the place... and if they didn't see it? Well then doubly shame on their greedy flipper a$$es for thinking this would be the next dump to pump back on the market for a profit.

ocrenter said...

"its not like they didn't see the neighborhood when they bought the place..."

but it was described as a colorful multi-ethnic up and coming neighborhood. Sounded so exciting!

Anonymous said...

There will always be slums. The bubble decade made slums attractive as fixer uppers. But when reality comes around, the slums will reclaim themselves and their rightful owners will return. Similar behavior has taken place in the lovely East Palo Alto, Oakland, Mountain View, San Jose, and Berkeley neighborhoods...to name but a few. I cannot count the number of times during the last decade when I looked at a sucker buying a inflated fixer-upper in a neighborhood with the majority of homes with bars on the windows. What in the world were these idiots thinking!? Answer: they weren't thinking....they were just acting like the rest of the herd.

Athena said...

You know... I remember my grandfather's ranch and I kind of think cows are smarter in a herd.

mackc_20 said...

It is interesting, I just stumbled upon these comments. How sad? Even in a bursting bubble, or whatever, it is so discouraging to see people write such negative things. I am 28, I have owned my house for close to six years in Oak Park. I love it. I lucked out. It is so unfortunate that people write such bad things, because most of my friends and other young professionals I know get sucked into the negative thinking and just get left behind. 6 years ago all of my friends said that they would never buy a house in my neighborhood. They didn't. Even if I didn't make any money off my house (Which I could even in this market) I still would have ended up ahead even with property taxes and such.

Deflationary Jane said...

I know someone from campus, his son is employed in a technical field here and he bought in Oak Park during the boom. Between having to fight crime and being underwater, he advised the son to let it go back to the bank which he has.

Cute house too just off 1st and Stockton. They tried to rent it out first but that failed. That's supposed to be the 'good' area of Oak Park. But investors are buying there at 20k to 50k homes, slapping paint on them and then asking for midtown rental rates. The rental market there is flooded with a heinous vacancy rate.

Several blocks over someone is trying to sell a little brick place for 299k in a more, um, challenging neighborhood. Like that's going to happen.

It will loose 75% of it's 2004 price by the time it sells.