Housing crisis fueled by greed

Juanita Sumner is a longtime observer and critic of local government.

Discussions regarding housing sales in Chico are always full of hyperbole. Some say we have a “housing crisis.” Housing prices have increased, whether you buy or rent. Some say it’s “the market.” I say it’s unbridled greed on the part of developers and real-estate agents.

Realtors drive up prices. In “Locked Out” [CN&R cover story, April 24], real-estate agent Eric Christensen says he “has seen asking prices go up 5 percent over the last two or three months.” Realtors set the price of a sale “at current market value,” meaning, simply, what everybody else is getting. If the house around the corner just went for $225,000, then why shouldn’t you ask the same or more for your similar house in the same ‘hood? Christensen admits he doesn’t advise people “to sleep on it anymore.”

Well, why not? Buying or selling a house is a big move that should be slept on. A good agent doesn’t use panic.

Investors drive up prices. I am contacted regularly by anxious real-estate agents interested in one or another of my rental properties as an investment or tax exchange. I have a postcard saying, “I am interested in buying an investment property in Butte and Tehama Counties. I am currently involved in a real estate exchange. I am a strong, capable buyer who will offer at least 50 percent cash down on any purchase.” How does the little family compete with that kind of business machine?

Developers drive up prices. Greg Webb bought the land on which he is currently building the Amber Grove and Peterson subdivisions over 10 years ago. But in five years he’s raised his price tag from $129,000 to $270,000. Tom DiGiovanni’s Doe Mill Neighborhood started at $300,000 last year and has climbed to $380,000. A Heritage Partners designer named Peter told me, “That’s what people are buying.” In other words, these developers think it’s OK to keep driving up the prices as long as somebody will pay. Locals selling their older homes ask, “If they can get that kind of money, why can’t I?”

Ironically, the workers who build the houses are not seeing the kind of increases in their wages that their employers are seeing in profits. “If you were a carpenter…” (Everybody’s business, CN&R, April 3) quotes carpenters’ wages at $35,000 per year. That is optimistic; most make less.

There’s the real "housing crisis"—a swarming feeding frenzy on the part of developers, real-estate agents and investors. Those who drum this "housing crisis" hyperbole are the ones with the most to gain from public panic. Chico, as a community, is losing hand over fist. We have an overblown development community that is working to suck whatever profit it can out of our town. And we seem to have a community that is willing to believe this Henny Penny panic story, running straight into the jaws of Foxy Loxy.