(no subject)

[garote]

So for the past few days I've been worrying about future plans - trying to decide where and how we can improve our position - and I've had to come to terms with something: My wife and I are essentially alone in this.

We've both come from extended families of people who, when the time came to own property, have had help from relatives on one side or the other, husband or wife, or even both. In some extreme scenarios that property already existed, or was even purchased outright for them out of a family trust. For La and I, whatever money may have been available has either dried up or been applied elsewhere. Whether we choose to moan about it (and we don't) is irrelevant: It's just the way things turned out, and we have to accept that we both basically start from nothing.

The problem is, we live in an area where it is completely impossible to start from nothing. On a salary that would make both of us very comfortable elsewhere, we are simply treading water here. Any meager savings we accumulate gets crushed by unforseen costs. For example: Three days ago a driver made an illegal U-turn into the Accord, smashing the front headlight assembly. The repair estimate is almost three thousand dollars, and the other driver - who was clearly at fault - is uninsured because he was lax in his payments. It will be months before we see anything from him, whether we work out a payment plan or have to take him to court, and in the meantime we can't drive the Accord. So I walk to work every day and La takes the van to school.

I see houses proudly labeled "STARTER HOME" - run-down shacks on postage-stamp lots - listed for half a million dollars. I see the median rent, whether for a house, a room, or simply a loft, going up year over year. Not even holding still. The more I think about it, the more trapped I feel, and the more I return to the same conclusion: We cannot make it here, or even anywhere around here. We have to leave.

In San Jose last year, the MEDIAN home price was over seven hundred thousand dollars.
Compare this to:

• Portland, OR, where the median was $240,000.
• Sacramento, CA, where it was $225,000. (Ten years ago it was half that.)
• Houston, TX, where it was $150,000.

In considering future moves, I've narrowed it down to those four choices. I can find a job in any of the four cities above and move there, and purchase property ASAP. The job market is the best for me in San Jose, but due to the astronomical property cost, if I were to buy there it would have to be part of some group deal with a friend or friends. Two houses or a duplex on a single lot, for example.

Or there's always Alaska, where for a half-million you can buy this house in Seward, on - yes, you read that right - a 53,000-square-foot lot. Six bedrooms, five bathrooms, nine-foot ceilings.

La finishes school here in December. If it weren't for that we would be planning to leave in a matter of months or even weeks, but it looks like we're waiting until years' end.

Comments

[thegoodreverend.livejournal.com]

The condition is/was very similar down here. We didn't start from nothing, but we were likely in a situation similar to yours. We looked around quite a bit and finally found our condo, lower in price than similar places because it has a Santa Ana address (considered a "bad" area). We got a loan through Phaedra's credit union as first time buyers, didn't have to put anything down, and our monthly payments are similar to that of rent (with a few other costs, of course, offset by cutting on other things).

My point - it can be done, though it'll likely be easier in the places you describe. Remember that the median means there are as many homes below that price as there are above - it's not necessarly an average or even a common amount. Remember also that your incomes will generally be lower if you were to move.

Best of luck - it's tough. But it can be done.

[garote]

Thanks for the encouraging words :)

[aquestrian.livejournal.com]

I empathize, living in New York and all.

I live in a little under 300 sq. feet, and my rent is $1335.75 a month. *sigh*

I'm totally moving next year.

[garote]

Holy *#@$*@)!

That's costly!

[maggiedacatt.livejournal.com]

I totally hear you. Everywhere Lucas can do what he does (work for 'evil' big pharma) is really expensive. It's mostly just here and San Diego. :\

I want to move back to Colorado. There are like two pharmaceutical chemists in the whole state.

car

[(Anonymous)]

Check your insurance policy....it probably will cover damage from an uninsured driver.

Re: car

[garote]

Turns out they do! Now we just have to wait 500000000 years for the other guy's insurance company to mail us a letter officially disavowing him, and then we can see about beginning the process of starting to initiate a request to aquire the authorization to procure a rental car.

[nekidwhiteboy.livejournal.com]

Oh my god, if you move to Texas, please don't move to Houston.

[garote]

Perhaps I meant Austin. The hippy-ville of Texas(tm). :D

[nekidwhiteboy.livejournal.com]

Austin is pretty cute and totally inhabitable. A college town at its heart, but certainly not a bad place to live, and the people there are pretty cool from what I experienced. It's also one of the more expensive cities in Texas to live in but it's probably nothing compared to what you're used to.

Houston is ugly, awful, stinky, mean, fat, hateful, and doesn't even have pretty public art or skyscraper architecture to make up for it. Even Dallas is way better than Houston :)

[robocowboy.livejournal.com]

In 2003, when Lam and I were still living in Arroyo Grande (just south of San Luis Obispo), we tried and failed to buy a "cheap" $240,000 condo. Housing prices were quickly on the rise, and we just missed our opportunity. A short time later, the same condo re-sold for $280,000. We decided to pay down all of our debt and see where we could get from there. We did it, too. Credit cards, student loans, etc, all gone. Zero debt. It was a good feeling.

By this time, it was summer 2004. When we looked around again, it was too late. We started too late and could no longer afford anything where we lived. It was all at least $300,000 and higher (much higher). Houses in San Luis Obispo were already over $600,000 and rapidly increasing. I knew I was lucky to have a high paying job considering my age, education, and experience, but the high pay was useless in such an expensive area. We could either move (which might have been a good idea, actualy) or just buy an investment property out of the area. Since I hadn't yet begun my job search, I decided it would be hard to find another high-paying job elsewhere. So we decided to get an investment property.

Lam remembered something about a new UC being built in Merced, and I also remembered hearing about plans for a new UC in the valley. We investigated, and the new campus was just a little over a year away from opening. This seemed like a perfect opportunity, so we went for it. We found a house for $279,000 that would have been a dream house to live in, if it weren't in the central valley. Lam and I are not fans of the valley and wouldn't be likely to live there, but the house seemed like a perfect investment. Four bedrooms, nice back yard, almost 2,000 square feet. Amazing. And we could actually qualify for a loan to buy it, too. So we did.

The only problem is that rents out there are nowhere near high enough to cover the mortgage. That's not so bad, though, because the ammount of money I've "lost" every month by paying the mortgage has more than been made up for in the increased value of the house. Now, if I wanted to sell it, I'd have some money to use for a down payment on a place to actually live in. I wouldn't even have to leave the area that I like.

I've wrestled with the morals of being a landlord, but I've been a good one. Lam and I checked out all of the property managers until we found one that we could trust and would treat the tennants right. We fixed the place up as nice as if we were going to live in it, and made sure it was a good home.

I'm glad that this has worked out as well as it has, but in hindsight, it might not have been worth all of the effort. Buying a house and fixing it up are both a lot of tedious and tiring work. If I just started over at the time when we had zero debt, moved to a new place, got a new job, we'd probably have done just fine as well. Hard to say, though.

Anyway, the reason I'm telling you all of this it just to give you another perspective. You may not want to go this route, and it's certianly not a sure-fire way to success or anything, but it might work.

I guess you need to think about which things are the most important to you: location, size of home, job, income, and figure out which to go for and which to comprimize. Before I moved to San Francisco, I tried for months and months to get a job in Portland. It just didn't work out. I'd have been able to afford a house up there no problem (as long as I could get a decent job) but it just didn't work out that way. I ended up in one of the few places even more expensive than where I had been, and I'm still renting. But now, at least, I have the option to try to buy something using an investment in a cheaper area as leverage.

It might be something to consider. There are many small cities across America that have low housing costs and reasonably high rents. I've considered getting more places, but I'm not interested in being a real estate mogul. I just want to be able to afford my own home. Sometimes real estate is the only way (I know of) to get ahead, though. Getting ahead is not easy if you don't have some kind of big bucks job. And those jobs generally aren't worth it if they take a toll on you in other ways.

Either way, good luck.

[garote]

That sounds to me like a stroke of genius. If I made enough money where I'm at now to do more than coast in place, I'd be jumping to do the same thing.

Though that's not entirely true - if life would ever cut me a break, I could do more than coast here. We were in great shape January of this year, in fact, but between then and now several things happened:

• Dishwasher broke. Piece of crap. Sat broken for four months. Then we replaced it: $700 with installation. This one actually cleans dishes.
• Honda Accord was late for 100,000 mile tune-up. Gave it "the works". Replaced water pump, et cetera. $1000 and change.
• Honda Accord went through two tires: $300 total
• Van had major brake job: $900 or so.
• Replaced too-small mattress that had been caved-in for the last year. Found one at 40% off. Price with box-spring, even after discount: $1000
• Bought Ma a new computer (iMac G5) as thanks for helping us pay off debt. Price, after various shenanigans: $500
• Sold my old laptop, bought a new one. Price difference, including upgraded RAM and AppleCare: About $1000.

And those are just the major things. With the minor things ... well ... You know how it goes. :)

So if I could get a nice quiet period, things would be alright. This summer's looking good for that, so long as we keep our travel ambitions low.

[garote]

Location: Personally, I could live almost anywhere, with the possible exception of the LA basin. Ideally I'd want a place that's got trees around it to settle down in, but for the next five years or so that doesn't matter. I can take heat so long as it isn't overwhelming, like say weeks and weeks of 100 degree weather, and I can take cold just fine though the detrimental effects of snow on cars and driving worry me. What I'm really interested in, though, is finding a place to live that is close to friends and/or family. I haven't really had that since High School ended and my parents sold their house, and I miss it. Right at the top of the list is my pal Andy - I think it would be great to live near him and his kids - but I haven't found a way to make that happen. (I got close at the beginning of the decade when Andy and Amber almost moved to Santa Cruz to share an apartment with me and Carolyn. He even got a job here, working at the same company I did. But one day while we were apartment-hunting, Andy got a surprise phone call: Amber was pregnant! That put the idea of moving on the back burner.)

Size of home: It needs a good kitchen with a GAS stove and adequate pantry space, a good-sized closet, a room we can turn into a study, room enough for five or six bookshelves, and space to park two cars. A bit of garden space would make us happy but isn't essential. Same with a bathtub. The price for that around here? Seven hundred thousand dollars, in the city. 30 minutes out of town: Five hundred thousand.

Job: Brother, if it paid the bills and the mortgage, I'd dig ditches for a living. Sometimes I think that would be preferable to IT work. I've also considered teaching as a desired profession, but that pays - as my acquaintances in LA put it - "double-shit pay". My current focus is in learning Cocoa and OpenGL on the side, in pursuit of a job at Apple or some other OS X-friendly company ... but this may just be the equivalent of shooting myself in the foot because Objective-C isn't a relatively popular language, and probably never will be. In OS X application development you usually pair programmers with an app and they remain stuck together for the life of the app. Why is this so? Because for OS X you have two classes of applications: The "upper-class" and the "lower-class". The upper-class apps are the big cross-platform clunkers maintained by big clunky companies, like Adobe, Blizzard, Microsoft, and the late Macromedia. The lower-class apps are the ones written by individual authors or loosely incorporated cabals, and are usually shareware. They'd no sooner "hire" an external developer to work on their app than they'd "hire" a professional bowler to play a few rounds with them down at the arcade. In this landscape an unattached programmer is likely to starve. Not so in the Windows universe, where there is also a large and lucrative community of "middle-class" apps to develop. E.g. "We need a tool that our field-workers can use to send survey data from their CE handhelds to our proprietary GPS-aware landscape resource mapping tool", and, "We need someone to help develop a particle physics simulator for our kick-George-Bush-in-the-Nuts game", and the like. :)

Anyway, I digress. In the line of being a real-estate mogul: What's stopping you from doing this, in a way that spreads the risk a bit? What if you formed a "real estate speculation" group with your friends; checking out places together, pooling the mortgage payments, only buying what you all can agree on, et cetera?

[robocowboy.livejournal.com]

In the line of being a real-estate mogul: What's stopping you from doing this, in a way that spreads the risk a bit? What if you formed a "real estate speculation" group with your friends; checking out places together, pooling the mortgage payments, only buying what you all can agree on, et cetera?

...uh, nothing, I suppose. Not a bad idea, but I'm not sure if it's what I want to spend my time doing. Then again, it might be better to be walking around through houses than to be sitting in a cubicle listening to the air conditioner hum and waiting for go-home-time.

[garote]

Well, you were absolutely right. It took another six years, but real estate "speculation" - in the form of buying a place that can be rented out - has completely rearranged my finances.

One maneuver, with some dogged paper-pushing and a few years of minimalist living afterwards, and now instead of feeling hopelessly trapped, I'm a stone's throw from a cheap retirement. Holy shit what a difference it's made.