You know all those people who bought spacious deluxe new homes in sprawling exurb developments, then lost the properties in foreclosure when the real estate market collapsed? Well, their younger siblings in college may now be living in these houses, which boast features you won’t find in a typical dorm or frat house—great rooms, chandeliers, swimming pools, three-car garages, kitchens with granite countertops and deluxe appliances. Anybody feel like cramming for that final in the Jacuzzi?
The New York Times reports that in Merced, Calif., college students and realtors have found a solution to address both the shortage of on-campus housing at the local state university and the abundance of luxurious McMansions sitting vacant and in foreclosure. You guessed it: The college kids are moving into the oversized homes in overbuilt, “Desperate Housewives” type neighborhoods, making them seem desperate in a completely different way.
This is probably not the scenario dreamed up by developers years ago. Merced, however, is the third-ranked city in the U.S. for metropolitan-are foreclosures. Property values have plummeted: One homeowner in a development that now hosts college student renters paid over $500K for a house that’s worth around $220K. It’s no surprise that so many owners found it in their best interest to walk away from their mortgages.
What is surprising, though, is the current scene in these neighborhoods of luxurious newly built single-family homes. Six-bedroom houses are now split among a half-dozen or so students, who pay $200 to $350 apiece in monthly rent—and who often get their own bedrooms and bathrooms, as well as access to pools, hot tubs, and kitchens that are nicer than the ones in their parent’s homes.
The UC-Merced free transit system even does pickups at many of the subdivisions where students now rent.
What do the non-student neighbors think? Naturally, this is hardly the scenario owners envisioned when they bought their homes years ago—not only are their properties worth a fraction of what they paid, the presence of beer-pong-playing neighbors will ensure that property values don’t rebound anytime soon.
One homeowner sounded not just upset by the student renters, but a bit jealous as well:
“I think they’re the luckiest students I’ve ever come across,” he said somewhat bitterly.