Wednesday, Jan. 07, 2009

Living with less: People double up to save homes

Finding roommates keeping roof over desperate homeowners’ heads

MYRTLE BEACH — Merry Dailey needs a roommate.

She lost her job at a Myrtle Beach-area Wal-Mart in November after finding out she has some serious health problems, and she’s caring for her disabled husband, who also had to leave his job at the same store last year.

“I’m at bankruptcy right now,” Dailey said. “Right now, I’m fighting to be able to hold on to this house. I said a prayer last night.”

As homeowners and renters are trying to make ends meet, more people will be sharing living spaces.

“People are cutting costs, and they are going to try everything they can to control expenses,” said Tim Koch, finance department chairman of USC’s Moore School of Business. “Every possibility, every option for doing that, will come to the fore this year.”

Carol Johnson said the down economy is forcing her to look for a roommate to share the two-bedroom townhouse she rents.

“It’s either that, or I risk losing my house or my car. One or the other,” the Myrtle Beach resident said.

She started searching in November when she realized that her income wasn’t keeping pace with her expenses. One problem was that her pizza delivery job, one of two jobs she had at the time, wasn’t bringing in as much money as it used to.

“We have people that just don’t want to tip you. They don’t want to give you any extra money, and that really hurts,” she said. Winter months are usually slow, she said, but “it’s a lot worse this year than it was last year.”

Johnson picked up a third part-time job this week, but she doesn’t know how long she’ll be able to stay in her home if she doesn’t find a roommate.

People have contacted her about renting the second bedroom, but she hasn’t been able to find someone who’s willing to pay half of the $750 monthly rent.

“When you go to look at how many rooms are for rent out there, there’s just so many of them, and the competition is so fierce,” she said. “You don’t want to give your room away.”

Mark Howell, who lives in an apartment in The Market Common on the former Myrtle Beach Air Force Base, was luckier — he found someone to live with before his wallet got too pinched.

In October, Howell moved in with a friend, going from a one-bedroom apartment to a two-bedroom place across the street. He wasn’t in a tough financial spot at the time but has since been hit with a 15 percent pay cut in his job working for IBM. Now he’s glad that he’s paying $750 a month rather than $1,100, he said.

“It worked out really for the best,” he said. “With that pay cut, if I could have afforded to live there, it would have made it really, really tight.”

Homeowners who cannot afford their house payments might be tempted to sell, but in this market, that’s not often possible or a wise move.

“I’d lose $30,000 if I sold my house right now,” Dailey said. Instead, she’s renting three rooms in her four-bedroom house, and selling off things she owns to raise cash. A retired business owner who moved to the Myrtle Beach area from Asheville, N.C., two years ago, she said she has always had roommates since she bought her house.

But now, it’s critical that she rent all the rooms.

Her mortgage and insurance is $1,325 a month, and she rents each room for $300 plus a third of the utilities.

“I’m not trying to make a profit, I’m just trying to keep a roof over our heads,” she said.

Some of the people who have called about her ad on craigslist.com are in the same situation.

“One woman, who’s coming to look at the room next week, just graduated from Coastal (Carolina University) and can’t find a job,” Dailey said. “She has to give up her apartment.”

Koch said people like Dailey are doing the right thing in trying to keep their homes and trim everywhere they can, because the market will turn around — eventually.

“A lot is going to depend on the new administration, but I’m very hopeful there,” Koch said. “They realize this is very serious, and they are going to throw money at it. Things are going to be rough for at least the next six months.”

He said there’s a push to drive interest rates down and regulators are pressuring banks and mortgage companies to modify mortgage agreements when they have customers willing and making an honest effort to pay. He said they can lower the principal, lower the interest, extend the length of the mortgage or even cap how much of a person’s income can go toward housing.

“The whole point is to keep people in their homes, to keep those homes off the market, and to keep people paying,” he said. “That way the lender wins and the homeowner wins.”

He advised people to stay as liquid as possible, to make sure their jobs are stable, be prudent and have a plan in case they do lose work.

For Dailey and her husband, Bruce, who have no medical insurance and little money coming in, the goal is just to stay afloat and find work again as soon as possible.

“We just need a good person to rent the room so we can have a harmonious home and survive the coming year,” she said. It’s going to be difficult for every single American.”

Lorena Anderson and Jessica Foster are reporters for the (Myrtle Beach) Sun News, a McClatchy Newspaper.

Get The State newspaper delivered to your home. Click here to subscribe.