Eighth report in an ongoing seriesRediscovering the Middle Class.
Towns surrounding Interstate 495 are where families moved to find more space; where they got more for their money; where they had more of a community. I’m driving to the home of Doug and Karen Mow. Heavy rain obscures my view of the exit for Franklin like the dampening lingering effects of the recession. It’s made it hard for many living around I-495 to see their way. What was also hard for them to see is what would happen to housing prices when the recession hit in 2008.
"Yeah, we noticed," Doug Mow said. "We got killed."
Mow and his wife Karen have owned their home in Franklin for nine years.
"We’re one of the unfortunate few or unfortunate many who have mortgages that are underwater," he said.
They sit in their living room trying to make sense of how they got here. Doug is a high-tech marketing consultant.
"We were living in Denver," he said. "And when I was in Denver there was a market crash and I had an opportunity to come back to the East Coast and work in tech in Mansfield. So buying a house around 495 made sense … and we looked at a lot of different communities and what we found was that we had a pretty good price for the value opportunity here in Franklin."
A good commute, good schools, good value. Then the bottom fell out. Their $500,000 house is now worth half that.
From a financial stand point, we don’t see ourselves getting out for a while," Mow said.
That’s true up and down 495, from Lawrence and Haverhill to the north to Wrentham, Plainville and Attleboro to the south. Like the Mows, many homeowners in these communities lost 50 percent of their value between 2006 and 2012, according to the Warren Group.
"The reality today is that your status in the middle class is incredibly tenuous," Mow said. "All it takes is one big recession. One layoff. Your house is already underwater. You’re done."
Middle-class Americans like Mow see their images reflected in the homes they buy and their futures in the equity that accrues. By this measure the future is a lot brighter for established middle-class residents in towns along 128 than along 495, argues Tim Warren, CEO of the Warren Group.
The reality today is that your status in the middle class is incredibly tenuous. All it takes is one big recession. One layoff. Your house is already underwater. You’re done. --Doug Mow
"That’s not to say that 495 is doing poorly," Warren said. "But the communities around 128 are recovering better than the ones around 495."
Location matters.
"Middle class covers a lot of territory," said Scott Van Voorhis, a business columnist who has been writing about real estate in Massachusetts for two decades. He compares the middle class in Franklin and Burlington.
"Franklin’s a little more of the middle class as it was and Burlington is where a growing affluent part of the middle class is settling in and transforming that area," Van Voorhis said. "Franklin could be put on to 128 and could be very much like Burlington and part of it is geography."
And like Route 128, much of the recovery around 495 centers around jobs.
Stacey Waterman, a restaurant server and a homeowner in Groton, where the average house sells for $480,000, has seen the value of her home rise in the last six years.
"We’ve got a $50,000 increase," Waterman said.
She attributes it all to what’s happening next door.
"Having Westford as a next door neighbor, that town has had so many businesses come and have their offices there that 495 is the new 128 loop," Waterman said.
Van Voorhis says he wouldn’t go that far. Many of the new or expanding companies along 495 are in manufacturing and retail, compared to the far more numerous biotech, pharmaceutical and high-tech companies along 128.
"People who work in these companies are making larger salaries," he said. "495 towns are still kind of more middle-income towns."
Warren agrees.
"In former years there were a lot of high-tech companies along 495," he said. "A lot of those have gone away, and the lack of access to those higher-paying jobs is resulting in slower growth for the communities along 495."
Erin Lynch
Slower growth and greater income inequality. At the Franklin Food Pantry, Erin Lynch explains who’s coming in these days for help.
"Families that look just like me or you and live right next door," Lynch said. "This year about 600 families have found their way here. We had a woman come in one day who had a very difficult time even entering the building because it was such an emotional step for her."
She never pictured herself needing this kind of help.
"A woman who was, by all outside indicators, very high-middle-class and had probably struggled as long as she could to hold on to that identity," Lynch said.
This in Franklin, cited by CNN as one of the best towns in the country to raise a family.
In his living room in Franklin, Mow is keeping a close eye on the clock. He’s waiting for a client to call; a call he cannot afford to miss.
"Looking down at the two phones right on the table right in front of me and my urge to go look at it right now while I’m talking to you," he said. "I have a lot of concerns that way."
Concerned about holding onto clients; Concerned about paying the bills. His wife Karen learned about the growing need at the food pantry and called to volunteer.
"I guess you don’t really see that a lot of people are in need," he said.
"We’re living in a very different economic reality that is really on thin ice, and it really doesn’t take a lot to just send you right into the depths," Mow continued. "And I think the scariest part of the recession was we all got really close to that. My mortgage is already underwater, and how am I going to pay for that? And my kid’s going to college, and how am I going to pay for that? And then if you’ve had a stable life that whole time, what’s it going to be like when the rug gets yanked out? What’s it like living on the street? I don’t know. I don’t know how to do that."
Mow doesn’t think he will ever be homeless. But he keeps an eye on the clock on the wall of his home — now deeply submerged in mortgage debt — and waits for the next client to call; a reminder of his precarious position in the middle class.
