Personal Reflections on Schrödinger’s Cat and the U.S. Housing Crisis
Why the US Housing Market is Like Schrödinger’s Cat –
For many of us, finding a home right now is little like living with Schrödinger’s Cat. This is how it’s been for us.
In early 2019, during the darkest days of the pandemic, we decided to buy a house. We wanted to move closer to my mother-in-law’ assisted living home and could use a little more space. We’d owned several other homes before. We each had excellent credit, a solid and comfortable income and plenty of cash. We set out optimistically to find a place to transform our lives.
Across the country, housing prices across the country were up 19% that year. In Phoenix, this number went as high as 32%. The median listing price for a home went from $250,000 to $350,00 to $417,500 to $485,000. I don’t know what it is today. I stopped looking because I didn’t want to know when it hit half a million dollars. “Who has this kind of money?” I would ask. Realtors told me it was the “lack of supply” driving prices up. Those out-of-state buyers, often without even seeing the house, were paying whatever it took to get the winning bid – and they are paying in cash.
A retirement community went from being the type of senior havens Phoenix is known for to a gentrified upscale golf community – with people paying half a million dollars or more for 50 year old trailers in horrible shape on tiny plots of land. We shook our heads in disbelief and moved on.
Realtors became so busy they stopped returning calls and emails. Many stopped showing homes privately anyway, so there was no point in calling. Many homes were sold the very day they were listed. Others were put up at what essentially became a blind auction. “If you want to see this home, come to the open house on Sunday between 2 and 4. We’re accepting offers until noon on Monday and will accept the winning bid at 5 p.m. All other others will be held as back-ups if you wish.” We stopped calling realtors and stopped going to open houses.
We found a few homes we really liked. We were outbid by “investors” for an undisclosed amount of cash three times.
We watched a house go on the market, only to be removed a week later. The next month the same property was offered again at a substantially higher price. This cycle was repeated several times until it sold.
When we sold our previous homes, we made tiny repairs, cleaned up the clutter, tossed in a new throw pillow here and there. But from 2019 through 2021 we saw over 200 homes, and most in pitiful condition: dirty, messy, sometimes even smelly. This dereliction wasn’t limited to cosmetics and cleanliness. We saw several homes with roofs that had lasted beyond their expected lifetime – often 50 or more years old and in need of repair. When we raised concerns, the realtors simply shrugged and told us that most buyers would “just accept” that would need to buy a new roof, rewire/replumb the house, remove mold, or tear up the carpets and put in a floor. You get the idea. Whatever the market will bear.
The climate grew toxic for anyone who wasn’t one of the mysterious cash buyers. Some real estate listings began to say, “no FHA buyers accepted, cash preferred, or no inspection accepted.” Still, we kept looking and made a half a dozen offers over those two years.
Each time, we lost out to bids five digits over our offer, and usually for cash.
Early this year, my husband had a great idea. He was browsing new home listings, as he did every morning, when he fell upon some prices in nearby Tucson. While these were high too, they were much lower in comparison to Phoenix. We began to think owning a nice little home, even with a view, was still possible in our beloved Southwest and we found it – a little beauty nestled at the base of a mountain. I thought the views of Pusch Ridge were the most stunning I’d ever seen, and there was a nice home for mom around the corner. Sure, it was old and needed some updating, but at the prices down there, we could afford to fix it up once it was ours. Just to be safe, we offered $11,000 more than asking price. With a signed contract, we started doing all the paperwork required to get a mortgage. After many twists, delays, and frustrations, it looked like we were finally ready to close. I imagined myself sitting in my elegant courtyard, gazing up at my mountain while I sipped my coffee in the morning. I would then walk the dogs along the winding trails that surrounded the area. And at night, I’d sit in our backyard to look at something that most Phoenix dwellers lost a long time ago – the stars.
Last Friday morning we got a call. We were set to close in a week and had movers scheduled for a few days later We had long since given our landlord notice on our current rental home, which he rented again within days, for hundreds more than we were paying. It seemed that everyone was winning. There was one remaining condition for the sale to go through. The owner had installed heavy “security bars” on every door and window. While is a common choice, these bars were different. They locked from the outside with a key. This means that one could be trapped inside the home in the event of a fire or other emergency. The lender insisted that the seller must remove the bars before closing. While it would only cost a few hundred dollars, the seller refused. We offered to pay. She still refused, citing a fear that the home would be damaged in some way. We presented a written report from a contractor stating that this was highly unlikely but promised to cover any damages if we could pick the contractor. Still “no.” Our realtor tried to talk to the listing agent. Even the loan officer called repeatedly. They received no reply.
This woman had signed a contract. She had committed to removing these bars. But we didn’t want to sue. We wanted the home. I wanted the life I had begun to imagine as mine. We couldn’t understand her position, especially so close to our closing date. On Monday, I happened to read what was happening in Tucson. In the three months since had started looking there as alternative to the insanity going on in Phoenix, Tucson had caught fire. Housing rates were up 30% and cash buyers were becoming common. Now it made sense. She wanted out, and these bars were here excuse to kill the deal. This felt unethical, even illegal, but we didn’t have time to argue. We needed a place to live by Wednesday.
We immediately discovered that rents were going up at a higher rate than home purchases and it was no longer enough have excellent credit scores and a good income. You had to pay a fee of $100-$150 just to apply. And the online rental applications required lengthy personal histories for each of us. My husband is retired. But these systems didn’t have an option to say that one is retired. His only option was “unemployed.” Of course, with one member of the household “unemployed,” our application looked riskier than a couple with two jobs – even if my income was greater than theirs combined. We tried to explain, but we kept being turned down or simply not hearing back.
Finally, we found a house for a crazy high monthly rate. An actual human being showed it to us and was willing to consider us. We offered three months rent up front and moved to the front of the line. For a moment, I wondered about the other people on the list, the families we had beat out because we used cash to bully our way in. Then I heaved a sigh of relief that we had somewhere to go.
Now back to that cat. In quantum physics, a particle can be in two places or states at the same time. It is in the act of observation that the location becomes fixed. Schrödinger explained it like this: A cat is held in a box. We can’t see inside, so we don’t know if the cat is alive or dead. With the cat is a device that will release cyanide gas to kill the cat instantly. This device is triggers whenever it detects radioactive particles. Since radioactive decay occurs at an unpredictable rate, there is a 50% chance of the cat being alive at any moment. The only way to know for certain is to open the box. But this too triggers the device. When we open the box, the poor kitty is dead.
These past few days, my imagined life in Tucson has been slipping through my fingers. The walks I’ll never take. The mornings spent gazing up at the mountain from my courtyard. The nights in the backyard, gazing at the stars. I now know that I’m not moving to Tucson. Instead, I’m moving into a small, safe little house right here. I’ll pay about $40,000 a year for the privilege of living in a modest “middle class” neighborhood. And I’ll feel lucky to have it.
But tonight, I haven’t signed the document that cancels the contract on that house in Tucson. It’s sitting in my email, waiting for my digital signature. I’ve decided to wait until morning to do this. Until then, it’s still alive, suspended between a state of possibility and a state of “no way in hell.” So tonight, I cuddle with my lost dream one more time.
Here, kitty, kitty. It’s time to sleep. We’ll open that box in the morning.