Socioeconomics a far cry from 1965
February 14, 2003
Remember the days when mom stayed home with the children and gasoline cost a quarter a gallon?
In 1965 — the year South Lake Tahoe incorporated — things as basic as onions or as large as houses cost a lot less than in 2003. Wages were lower, but somehow most families managed with a single income.
Even though single-income families exist today, two-income households make it easier to not have to live check to check — especially given today’s property values in the basin.
South Lake Tahoe’s median home price doubled in six years to $270,000.
As a historian, Betty Mitchell — who runs the Lake Tahoe Historical Society — knows firsthand how socioeconomic lifestyles have changed over the course of a nearly 40-year span.
Her Bonita Road home near Heavenly was built in 1966 for $42,000. The house next door is selling today for $899,000.
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Mitchell ties the socioeconomic trends to tradition and expectations that people had about material possessions.
“I think it was tradition. Moms stayed home and were glad to stay home. That’s what their mothers did,” she said. “When people started out, their horizons were a lot lower. In terms of material possessions, they weren’t as acquisitive.”
Longtime Tahoe resident Ann Warren has watched more than prices of homes and furnishings rise as she raised her three children.
“We never felt we had a problem back then,” she said.
Where the Smart and Final is located, she and husband Al ran the Bijou Center market in the 1960s, a time when they were able to buy a four-bedroom home in Tahoe for $9,000. Today, it’s valued at $200,000.
“We’re making more money now, but prices are so much higher,” she said.
Case in point, the Warrens used to sell 5-pound bags of onions for 19 cents and cartons of large eggs for 55 cents.
“Because things are so much (higher priced), people can’t get by,” Warren said.
Lake Tahoe Community College business instructor Eric Sturgess said the trend is a simple economic principle — Tahoe wages, ranging from $6.75 to $44.99 for dishwashers to chief executives, respectively, have not kept up with the rate of inflation.
“What has happened is our socioeconomic situation has changed dramatically,” he said.
Sturgess points to the decade after 1965, which was economically speaking, defined as a period where an energy crisis caused high inflation. Real estate prices began to rise during the 1980s with the supply-side economics of President Reagan.
In the 1990s, the collective private debt surpassed the public debt in a mounting race that had many Americans in a spend-now, pay-later attitude.
“The opportunity for loans was better, and people were taking out more of them,” Sturgess said.
This includes home loans.
These days, real estate agents witness unconventional ways to finance a home.
“I’ve seen two families go together on a house. It’s not uncommon on the higher priced luxury homes. That’s why they get two master suites with shared ownership,” Prudential California agent Adele Lucas said.
Lucas, who works out of the Tahoe Keys office, has sold part ownership in a West Shore house with 11 shares.
Agent Pamm Bettencourt of Coldwell Banker has seen the same trend with second-home buyers. Duplexes lend themselves to the practice.
“Young families with two children want at least a two-bedroom, but people don’t have the $40,000 in cash (for a down payment) or (enough money) to qualify for the city program,” Bettencourt said. “As prices continue to rise, are people making more money and socking it away? I don’t know how our children are going to purchase a home if they have a medium type job.”
To help the next Tahoe generation with the largest purchase of their lives, Wells Fargo Bank has introduced a product called the Home Asset Management Program.
“There was nothing like this back then,” home mortgage consultant Methinee Pratoomsuvarn said of the difference in home financing over the last four decades.
The program allows buyers to take out any portion of their down payments within 48 hours so they’re able to use the money to remodel — as is needed with many homes in South Lake Tahoe.
“By the time you buy a home, you don’t have any money to fix it up,” she said.
Pratoomsuvarn will use the program when she closes on her home next week.
The money is transferred to a second mortgage — given a favorable credit score — that’s tacked on to the end of the primary account.
Susan Wood can be reached at (530) 542-8009 or via e-mail at email@example.com