Caveat Venditor1 As of the end of January, 2010, our 1,078 square foot home’s value near downtown 2 Phoenix, Arizona is $108,500, a numbing drop from its original purchase price of $278,000 in June 2006. We have “owned” our home now for roughly 1,340 days, that $169,500 decrease in value representing a drop of $126.49 every day since moving in; our home now worth 39% of its initial “value”. “Owned” in that we must also consider our mortgage of 3 two interest-only loans (80% and 20% with zero down payment ) at approximately $56 a day for a vague total representation of cost at $182 a day. Ten months earlier, in March 2009, the architecture office I had been working with for seven years closed its Phoenix office, my wife and I having moved to Arizona to start the office’s first satellite location. Fairly aware of and assuming its closure, I was probably more ready than most - personal website nearly complete, resume fully redesigned and updated, portfolio ready to print. Several others from our office, let go several months earlier, were still without jobs. For the first few months I looked hard at other Phoenix architecture offices, scouring company websites for design directors’ names to 4 send CV’s . Feeling fortunate at first, several interviews and lunches arranged - it seems most interviewers were looking for ways to pass an hour, have an ear to describe how dire their firm’s condition is, maybe hear firsthand how poorly other offices are doing and/or most likely to begin polishing up their own contact network when they are in the same situation a few months from then. Months pass, without the architectural job my body and mind had become used to having, time quickens even more. Phoenix’s coffee shops, multiplying monthly, are overfilled with out of work architects and designers. Days skip, weeks becoming months. The three-month emergency fund period most financial advisors recommend is quickly crossed off our calendars. Half of the employer contacts listed on firms’ hiring websites are no longer working there. Unfortunately these conditions are nothing new, not surprising, and potentially a new normal. Unemployment in construction 5 related jobs sits at 20% compared to national unemployment levels of 10% according to the Bureau of Labor Statistics. Seemingly, any office that mentions potential future work foresees only a flexible network of independent contractors and consultants expanding and contracting as work demands. Out of university and working for almost a decade now, contributing the maximum allowable to 401k and focusing our savings on retirement accounts, our cash reserves are 6 7 minimal. Those accounts quickly evaporate. Seeing the obvious trend, one starts
1
Latin for “Let the Seller Beware”
2
Zillow.com’s “Zestimate” is the sole estimate of the home’s value in this case as I have had three different real estate agent’s fail to return correspondence after agreeing to evaluate our home, certainly though it has decreased dramatically in value. 3
We will eventually be very glad our down payment was nothing.
4
Here begins the underground art of email address identification - once the receptionist denies revealing the address; one then blind carbon copies every potential first name/initial/last name/initial combination @ the companies domain name. 5
For whatever it’s worth I have heard architecture/design unemployment in Phoenix may be as high as 40%
6
Not even able to keep up with the cost of inflation; and like everyone else, 0% return on investment since graduating university in 2000 would have been the smartest investment possible. 7
There goes the Porsche for sale, bought at the height of profit sharing and year end bonuses.