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High Cost of Housing in California

When Kim and Jim Larsen planned to move to Northern California from Omaha in early 2004, they expected that they would have to pay more for a house in California than in Omaha, but they were not prepared for the magnitude of the difference. In Omaha, the Larsens own a typical three-bedroom home. It has a finished basement, where Jim brews award-winning beer and their high-school daughter has her computer, a family room, and separate dining room. The home has a two-car attached garage and a large fenced yard that borders a greenbelt area. The living space totals approximately 1700 square feet. Built in the 1970s, the house has been well maintained, and is on a quiet cul-de-sac with plenty of visitor parking. After meeting with some real estate agents in the area, the Larsens were pleased to learn that they can expect to sell their home for approximately $155,000, which will result in a profit of approximately $65,000; they purchased their home 12 years ago (Larsen, personal interview, Apr 1, 2004).

Unfortunately, the Larsens discovered that $65,000 is barely sufficient to make a down payment on a similar home in California. Relocating because of Kim's new job--she recently joined the staff of Kaiser Permanente as a psychiatrist--they set out to look at homes in the Sacramento/Stockton area. Homes that are similar in square footage, and with smaller yards, are currently selling for $350,000. In addition, there is no basement. If the Larsens want to avoid property mortgage insurance (PMI), they will have to put at least 20 percent down on the house, or $70,000. This, in addition to the costs associated with purchasing the home, requires that they spend more than they are making on the home they are selling in Omaha. Fortunately for them, Kaiser offers a low-interest down payment loan program to employees purchasing their first homes in California, a program that enables employees such as Kim Larsen to relocate from out of s...

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High Cost of Housing in California. (1969, December 31). In LotsofEssays.com. Retrieved 16:41, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1696018.html