We moved yesterday. Movers put boxes and beds on two local-sized trucks and drove them away to load into a semi for the cross-country drive. Movers were great. More on this fascinatingly different kind of moving company if and when they do a great job at the other end.
We moved yesterday. Exhaustion. Scattered non-thinking. Watching movers. Emptying the fridge. Moving food from its temporary storage on top of the butcher block island to a countertop after realizing the movers were finding other things to pack and could have been putting the island on the truck. Watching in amazement as, mere moments later, the butcher block island was encased snugly in a plastic cocoon, wrapped in furny blankets, and cocooned once again and then of course secured on the truck. Mere minutes elapsed between its status as useful part of house to anonymous item on truck.
We moved yesterday. After the movers left, Damian and I made one last visit to the local playground. As we arrived back at the house-which-I-can't-call-home, Dan returned from his last day of work and we cleared out the house together. The house smaller in the way that empty houses are. Uninhabited. Pretty walls. Pretty floors. Pretty built-ins. Looks like the new owner (we chatted yesterday) will be renting it out for at least a while, so someone will be enjoying the fruits of all our hard work after all.
We moved yesterday. Damian rolled down the car window as we pulled out of the driveway. "Goodbye, neighbors! We won't miss you!" I was too numb to feel. Goodbye, life in LA. Hello... ?
We moved yesterday. Stayed up till 1 a.m. talking with Tiny Coconut and Baroy. A perfect sendoff. We'll miss them, no doubt about it. We do have connections, do feel connected in Los Angeles. And yet. What makes a place -- a city or town -- home? Still pondering that one.
We moved yesterday. We are now in transit. Neither here nor there. We carry the essentials of home in our packed-to-the-gills minivan, a family of turtles, as we travel slowly across the continent.
More in a bit (tonight, I think).
As of today our house magically transformed itself into a pile of money in the bank. And yet it's still a house. For now. And we still live here. For now.
Strange, that.
We'll pay this month's rent to the people who now own this house, using the very money they just gave us for this house. It makes me dizzy to contemplate, in an MC Escher sort of way.
What I also find amusing and amazing and altogether peculiar about this is that it's money for nothing. For having the good sense or rather, good luck to live somewhere for a while and then – and this is the important part – to leave that place. Without the exit, the profit remains monopoly money, numbers on a piece of paper, bloating in theory but in practice? Simply a house. Shingles, lathe and plaster, paint and wood and plumbing. A house on a chunk of land that's worth one amount one year and a highly improbable amount more a few years later.
I'm sure honest-to-god wealthy people would consider this mere lunch money, and they're probably used to conjuring dollars from the air like a cadre of professional magicians, but to me, a rank amateur, it still has that air of "Where did this come from?" and "Whoa."
Of course, at some point we hope to plow it back into framing and foundation, walls and ceiling and floor, back into something concrete and far more tangible than the automated bank voice I listened to today on the phone reciting a bunch of random-sounding numbers into my ear with the melodic yet calm tones of a lobotomized preschool teacher. I'll be sad to see it go. If we're lucky, we can hold onto some of it as non-real estate investment. I hope. We'll see. And if so, maybe in time it will seem more real. More natural. More like ours.
I told our realtor today I'm almost tempted take some of the cash out in small denominations, fill my bathtub with dollar bills, and plunge my hands into it. Green dusty water. Making it real. But even then it won't be, will it? Just a different kind of symbol, that's all.
Strange world. Strange life. A cushion that feels theoretical and yet isn't. A house that gives you a going away present when you say goodbye.
Ah well. Back to packing.
Could it really be possible that -- completely accidentally -- we timed the housing market? This post on the blog The Housing Bubble has a lot of evidence that the market is finally starting to turn.
I've been reading Ben's blog for a while. Kind of addicted to it, in fact. This is our life. This is potentially our future. Will prices come down? They have to. One commenter a few months ago put it like this: if a house continues gaining equity at the current rate, what will it be worth in 40 years? Well, let's see. I just fooled around with the numbers, and it seems that our house has increased in value an average of 23% every year since 2001. An average, fairly nice but not great house in a decent area on the Westside of Los Angeles costs about a million dollars these days. If it keeps accreting value at 23% a year, it will be worth 2.6 billion dollars in 40 years. Yes, billon. Um, yeah. Right. Income levels? Not increasing at 23% a year. Inflation? Nope, that either.
This housing bubble has to end, and fairly soon, too. A million dollars for a 1500-2000 square foot house on a 6-7000 square foot plot of land in a fairly pleasant but not amazing neighborhood, that's already beyond absurd. Prices are cyclical. This history-making cycle is about to end.
We had to sell our current house to have the cushion we need for this move. We have to wait to buy a new house until we see what our life looks like in New Jersey/New York. If we can afford to stay there. What our income level will be. What part of our new town feels most like home. It's practical to wait for all kinds of personal reasons. But if it also means we end up buying in a saner housing market? That, due to pure serendipity, we timed this just right? That would be wild. So wild.
I guess someone has to benefit from the fickle winds of money and markets, why not us?
Because I said I would, because StealthPunch asked, and because if I don't write it down I'll inevitably forget the details, here's how we sold our house. Or, rather, how we made the decision about which of our three suitors was the right one. Don't know how helpful it'll be if you're not selling to investors, though.
Suitor #1: Spiffy, speedy, and direct. Made the offer the first day the house went on the market. An offer complete with bank statement showing he had the down payment plus some. When we said, "But you haven't even seen the place," he said, "I'll come by now." When we said, "But we're not ready to make a decision," he said he'd wait but he would not get into a bidding war. No way, no how. His goal: do a 1031 exchange, put capital gains back into properties and avoid taxes. Investment, pure and simple. And yes, maybe he'd want to build. He wanted to leave his options open. (I consider it probable, but you never know.) His company's longevity (our realtor looked it up): over three decades. His bid: list price.
Suitor #2: The shy type. No, scratch that. The impenetrable type. The two-steps-forward-one-step-sideways do-si-do type. Man came sailing into the open house, zipped through the house, handed our realtor a sealed envelope with a pre-written bid. But, um. Man was not buyer. Man was go-between (ie: realtor). Suitor never saw the place. Nor did any member of suitor's family. Broker said he'd send a pre-qualification letter over ASAP. Our broker said great. Next day, our broker said, "Where's the pre-qual?" "My printer broke, I'll get it to you now." Your printer? What, you have a bank in your realty office? What kind of meaningless pre-qual letter is that? Suitor #2's goal: to build. Wait, no, to buy for his daughter to live and THEN to build. Mmm hmm. And his daughter has no say in this? Has never seen the house? Mmm hmm. Sure, I believe you. Sure I do. His company's longevity: two years. His bid: $26K over list price.
Suitor #3: The "Hurry, hurry, I'm gonna be late! Late for a very important date!" type. Faxed over a bid the evening our realtor was writing up counter offers. Sight unseen yet again. His company was named something or other Exchange and his bid included some phrasing that left the door open to someone else buying the property, and he'd be the go-between. IE: his business was finding places for other people to buy as 1031 exchange-style investments (see Suitor #1). His company's longevity: can't remember, but there was something odd about it. His bid: $27K over list.
The dilemma: Suitor #1 was clearly the most solid. Had the money, had the track record. And he did his research up front: he talked to his architect, discussed the property with him. He called the city to make sure permit regulations hadn't changed recently. He knew whether he'd be able to build a condo complex on this lot before we even made the counter-offer. The other two guys might well back out during escrow. Builders do that all the time, apparently. They leap on a property, tie it up so it can't run off with someone else, then they see if they really want it after all. So #2 was definitely a gamble. And #3 might not make his deal during escrow. But. That's enough money to make a gamble feel worthwhile. If you're the gambling type. Which we're not. Except for the whole picking-up-and-moving-across-country thing, that is. But still. $26K, nothing to sneeze at. Could buy us more time to make this transition work. But if we fall out of escrow because we go with the wrong guy? Ugh. If a suitor takes you to the Four Seasons for dinner and settles you in box seats at the opera on your first date, that doesn't mean you'll have a caviar relationship. Or any relationship at all.
The solution: Through our realtor, we explained our situation to #1. Said, "We don't expect you to come up to the other offers, but can you make this an easier decision for us?" He came up halfway. $14K over list. We went with him. And it's worked out just fine. All the contingencies have been removed, right on time. This deal is going through, just as we knew it would when we signed the escrow agreement. Believe it or not, I trust this guy. And that's important here. I'd rather make less but see the money, y'know?
I write this sitting cross legged on a double bed in a tiny bedroom in a vacation apartment. Dan and Damian are playing table hockey in the living room, various relatives are watching something funny on TV in the adjoining apartment's living room, the remnants of birthday cake are tucked away in one of the two fridges, it's very late and nobody cares. We're in a seaside town (Seaside Heights, to be exact) on the Jersey Shore, or, as Damian likes to say, we're at the NJS (New Jersey Shore, you see). The very traditional arcade-games-and-pizza-and-bathing-suits style boardwalk is a few blocks from here, along narrow streets lined with tiny beach cottages that smell like sunlight and ocean. The vacation rental has wifi and a pool and life is good.
We got to New York -- should I say New Jersey? This will take some getting used to, this shift in focus – we got to this side of the country on Monday night. Sans cats but with a mission. To find a place to live, that was the agenda, the plan, and the hope and fear. When we got back from our last trip in April, I stayed up far into the night every night for a week, thinking and worrying about all the unknowns involved in uprooting our lives and replanting ourselves so far away. But one of the main thoughts cycling through my head, one of the main frets my brain kept chewing on and refused to spit out, was this. Where will we live? What will it be like? Can we find a house? Will we end up somewhere dank and dark, with constant footsteps overhead and never ending loud television sets? Will we have to squeeze our lives into a narrow, dark shoebox in a dicey neighborhood? Why are we doing this again?
As Dan and I started looking around, started reading Craigslist rental postings and MLS rental listings and New Jersey newspaper classified sections online, the fear didn't subside. A scant few houses, not just in our price range but in any price range. And the vast majority of the apartments were on the main drag (noise, oh my) or were in multifamily houses (homes split into two or three or four), and if someone's upstairs and the house wasn't originally built for this kind of separation, you hear footsteps and TV and coughing fits and loud sighs. You hear everything.
We wanted a house but would settle for a duplex, a side by side deal with more insulation between units and even maybe a basement. We wanted three bedrooms but would settle for two. We wanted a place with peace, quiet, and light but would settle for… well, we'd settle for a place we could settle into and call home base for a year or two. Renting after owning is hard to fathom, downsizing on purpose is harder in some ways. It's all doable, just odd. But if the place itself is depressing? Not good.
Tuesday June 21st, 1:30 pm. Time to find out. Time to see. We met with the realtor who showed us houses to buy last time. Nice woman. Down to earth.
Place #1. A house. We had high hopes. We were and weren't disappointed. Really nice dead end street, lots of kids. Clean back yard. Pleasant house, though a bit dark (Dan disagrees with my memory of this) and a bit small (I could get past that) and a lousy kitchen and lots of fairly awful wallpaper. But the bedrooms were nice sizes and there were three of them and the house had that old house charm in the details and it could feel like home and could we have it, please? But no, we couldn't. Even though two small dogs live there now and even though the landlady is apparently fine with these scrappy little guys, she has had bad luck with previous large, destructive canines and now says no means no. No dogs, no cats, no goldfish. No pets. No house for us.
Place #2. An apartment, ground floor in a multifamily. No yard. Kitchen the size of a closet – albeit complete with granite countertops and new tile floor. Kind of like gilding a mouse, y'know? And when we looked out of the windows, all we saw were other windows. Depressing.
I know that when you live in Manhattan, this happens. You live in a small apartment, you see other apartment buildings out your window. But it's different. Better insulation, for one thing. And fire escapes and city skylines and rooftops and such often combine to create a kind of alternate peace. But 40 minutes outside the city? Doesn't feel right. Suburbs are supposed to have benefits like grass and sky, aren't they? Isn't that the point? Isn't that the plus to balance out the away-from-the-action minus?
Place #3. So bad I didn't get past the front door. It happens. Amusingly, the apartment was painted in lovely shades of orange and yellow. Pretty paint doth not make a hovel less hovel-like. Dan went upstairs, came down to report that one of the two bedrooms had an unusual convenience: a washer and a dryer. Yes, right in the bedroom. Mmm. Moving right along.
Place #4. Carpeted condo backing onto the main drag. Not terrible if you like that sort of thing. I don’t. Also, small.
If there was a Place #5 I don't remember it.
Tuesday night was not a good night. My mind spun out. We were going to look at a carriage house and a duplex the next day, both via Craigslist (and both sans realtor fee). But a carriage house is usually a tiny place behind a mansion, and I imagined a Beverly Hills rich vibe all around me as I lived in someone else's back yard, and it felt squicky. And the duplex, well, we'd driven past it and it was in an area I would call urban, ie: heavily trafficked, dense housing, no yards. Interesting shops and the main drag in walking distance, but not what we thought we wanted.
I finally calmed myself down with a plan of sorts: I could come back in a month with Damian to check out new listings, we could ask the realtor to send us houses as soon as they popped on the MLS, we could even rent one sight unseen, couldn't we? It's not like a lifetime commitment, not like buying a place. And if we didn't find one by the time we moved, well, we could put our stuff in storage and stay with family until something came along. And something would surely come along, wouldn't it?
I was up till 4 am.
Wednesday morning. I was nearly half an hour late for a school tour, I met with the assistant principal and then met Dan and Damian at a local playground. I called the carriage house landlady. Sure, come on over. So we came on over.
Yup, it's on Mansion Row. Yup, it's a little house behind a big house. Yup, it's essentially in someone's back yard. But it doesn't feel like that. It's perched up on a hill, the lawn between the two buildings is large enough you don’t feel like you're on top of them at all. And the main view out the windows is of trees. Green all around. Peace all around. The main floor is wide open, living area, dining area, kitchen area all divided by space rather than by walls. Great light. Wood floors. Modern kitchen including dishwasher. Washer and dryer in the basement. Upstairs, two tiny bedrooms. The master bedroom has a slanted attic-room-like wall, making it feel even smaller, but oddly has a walk-in closet. The space between rooms is less hallway than alcove, big enough for an office or for a drum set.
And we liked the landlady a/k/a the woman who lives in the big house. Jewish intellectual, gray streaks in her decidedly uncoiffed kinky hair, around our age, warm and unpretentious. We said we were interested. We filled out the application, wrote a check for the credit report. Said we'd let her know for sure by Friday and drove off feeling ever so much better.
The duplex turned out to be nice but not nice enough. Depressing living room, basement which floods and won't work as a laundry room, no yard, not a very warm place. But a nice neighbor. Whose sons go to the school Damian will probably attend and who both play musical instruments (one is in fact a drummer!). We were almost kind of tempted, but not.
We went to my friend Cathy's for dinner (and a dip in their pool) and I called the carriage house owner to tell her we want the place. She ran the credit check. We went back over to the house after dinner, met her husband and kids. I was worried about this part. Would the husband be stuffy? Would Damian like the kids, his neighbors? Was this workable, would personalities mesh? They did. The girls took Damian down to their playroom, I heard giggles floating up. His giggles. And we liked the husband and I think he liked us.
We have a place to live in our new town. We signed a year's lease. They know our situation, know we plan to buy again sooner or later. Hell, I wouldn't be surprised if they end up helping us look! Nice people. My kind of people. Feels like coming home.
It'll be tricky fitting our furniture into a space smaller than we're used to but we can discard some and store some if need be. It may feel strange at first, two very small bedrooms instead of three-smallish-plus-office. But the open main space feels so good, so welcoming, and we got what we wanted above all else. Peace and light and a lease that starts in September.
I spent most of yesterday in a deep blue funk. I feel much better today, even though the situation is the same. Maybe I'm resigned. Maybe it's started to seem almost inevitable, the evolution of a city, and I'm partaking in that process whether or not I want to do so.
We've had three offers for the house. All from builders or investors with intent to build. None from people who would actually want to live here. At least four people/sets of people walked away from viewing the house saying they loved it and planned to make an offer and then… didn't. I think they all went home and, once they were no longer standing here, the spell was gone and the "Oh my god, sandwiched between apartment buildings??" reality hit full blast.
It was different when we bought the house. Not because it was an easy decision then. It wasn't. But because we were dealing with less than half the expense. Prices are so out of control in LA now. People are spending so very much money. And this is not a situation that can improve. You can add onto a small house. A dicey neighborhood can become gentrified. Apartment buildings aren't going to metamorphose into single family homes. You're stuck with them. It's no wonder if prospective buyers look at each other and say, "We're going to pay all that cash and live like that? Why on earth??" And, too, I think the recent spate of articles about the imminent housing bubble burst has people second guessing their choices. Rightly so. They may have to live in them a long time. That, or sell at a loss.
It seems that if we want to sell to real live people, we have to price the house lower than the market value, which is already lower than it would be if it weren't in an awkward spot (ie: between apartments). Maybe fifty thousand dollars lower. Maybe more. That money buys us another year of settling into our new life or, if things go reasonably well, it might be the chunk of money we need to make our down payment high enough to buy a decent house in Jersey. In other words, it would be a pretty dumb move to lower the price that much. Save a house, screw with your future.
It breaks my heart, this beautiful house gone. But in another way, I get it. The house is an anomaly. A relic. There are a few others on this block, in this area, but not that many. And it's not fun being a homeowner among renters. They toss trash in our yard, park in our driveway, talk on their cell phones outside our windows (okay, that last hasn’t happened for a while, but it has happened). It's a very urban environment, not quite the white-picket-fence dream. A condo building here would fit better. Would suit the neighborhood better. Would feel better to the people who buy in.
This house has an expiration date. We knew it when we moved in. Dan said he thought we'd likely be the last people to live here. We tried to fix it up, make it nice, entice people, avoid that fate. But it seems he was right.
I don't regret fixing the house up. For one thing, we had to give it that chance. For another, we learned a lot in the process, things I hope we can apply to our next house (whenever that may be). And we got to enjoy the transformation, got to be in a no-longer-dingy environment. More concretely, our realtor says it actually affected the price, even for the builders. For one thing, they won't build right away. This way, because it's nice, they can rent it out for a while, collect some money. It becomes more attractive as a result. Also, they know they might have to compete against people who want to live here, so they have to bid higher than they otherwise might. If a place is an obvious teardown, builders bid low. Way low. So our little spruce-up job more than paid for itself in profit. Just not the way we'd hoped.
We've countered the offers, we're close to a deal. We bow to what feels inevitable, or at least necessary. I was terribly, terribly sad yesterday. Oddly, the cloud lifted today. It is what it is. A house is not a person. Is not us. We walk away from this in good shape, in fact. It works. Not the way we'd hoped, but it works.
This is harder than I expected, selling a house. Oh, not because anything's wrong. In fact it looks like we'll have a minimum of two offers and this is before tomorrow's open house, which was to be the official date we're open for business, only six people snuck an early peek. We'll definitely sell the house, most likely by the weekend. Which is good. But hard too. People tromping through our house, our home, eyeballing our possessions. Making decisions, judgments, evaluations.
One guy who came by yesterday loved the house itself but ultimately couldn't get past the apartment buildings on either side. Which made me feel squicky somehow. Like: Hey, we've been living here for four years, are we idiots, then? I mean, I know. I don't like them either. And it was a difficult decision to buy, one I regretted and then didn't regret, then regretted, then resolved. I love this house. I hate this house. I love this house. Putting it on the market feels so poignant, feels so vulnerable.
Our realtor fielded seven calls this morning, many of them from developers wanting to know details about the grade of the land and how many units the property could hold. And the part of me that wants a clean getaway says, yes, let them all bid, all these builders, let them go into a frenzy over this desirable location, let them buy it for many thousands above our asking price, let us walk away with a bigger bundle of cash to start our new life. But the part of me that walks around the house smiling at the yellow walls and wainscoting and pretty fixtures wants to kick them out of the house with a snarl: Don't ever darken my doorstep again, you history-destroyer you! You insensitive churl! You're the people who have made the city ugly, you and your cement block apartment buildings on so many streets formerly lined with pretty Craftsman houses like this one. Smashing pride of place with the hefty blow of a wrecking ball.
On the other hand, a pair of women came by yesterday, their gazes caught by the for sale sign. From our realtor's description, I liked them. And it sounds like they fell in love with the house. Which is what I want. What I really, really want. For this house to be loved, not torn down. But this house is clearly out of their price range. They were going to head back to the bank to try and get qualified for more money, but hell. They shouldn't. Maybe we'd get our cash out this way, but they'd be in over their heads. I don't want to walk away feeling bad, feeling worried, feeling guilty for making a sale.
On the other other hand, five people (or sets of people) saw the house yesterday. Of those, two said no, one had already made an offer, one wants to make an offer but may not be able to (the women), and the final one asked our realtor if he made an offer right then, would we consider it? (Our realtor said, "Wait till Tuesday.") So it's not like the house is unwanted. But I can't shake the feeling that my house – and therefore somehow me – no, not me, my choices, my home, my intimate life – is being judged. It's like wearing your underwear in public, y'know? And asking people to buy it.
Weird feeling. Uncomfortable. Disquieting. I'll be relieved when this week is over.
Lovely vintage Craftsman; early 1900's charm and extraordinary detail. Gorgeous original woodwork: built-ins, crown molding and wainscoting. Hardwood floors. Great flow-through. 3 BR plus office. Charming country kitchen. Laundry room w/ extra half bath. Secluded front yard creates a sense of privacy. Large backyard with fruit trees. Front and back porches. Plenty of parking. Easy walk to boutiques and restaurants. Central air with filter and UV treatment; copper plumbing; earthquake bolting.
(pictures beyond the fold, as they say. Click on "continue" to see our pretty house.)
I was going to do this as a before-and-after set because every room you see in these pictures (plus some you don't) (well, okay, the laundry room) (and the front yard too) have been transformed by our sweat and tears. But I couldn't find the pictures I took way back when we first saw the house, so bah. And anyway, I'm tired. In the past couple of weeks, we've stripped and scraped and scrubbed horrid carpet glue off the front porch and then painted it, also painted the laundry room, also done a lot of general straightening and organizing.
The place is ready to show. Wow.
(Oh, and blurb wording and picture taking all copyright by me, myself and I. I love working with a realtor we've known for over a decade. He knows to give me room to do some things myself.)
Our broker put our house on the MLS (multiple listing service) yesterday. By last night, he'd already gotten a call from a broker representing an investor who wanted to bid on it sight unseen. Whoa.
As of today (3:45 pm as I write this), he's gotten something like five calls from brokers. He told them all that the first showing is Tuesday at the broker's open house. Two said okay. Three said their clients can't come Tuesday, can they see it over the weekend, pretty please? Whoa.
Also? The investor came back with an actual honest-to-god bid. For our asking price, no underbidding at all. Whoa.
My head is spinning. This is happening so fast. So so fast.
(I'll post the listing wording and pictures in a separate post.)
Our house theoretically goes on the market in a week, but that's just to whet buyers' appetites. Our realtor is going to stipulate no showings until the broker's open house on Tuesday June 7th.
Let me repeat that. our house is going on the market. People will be walking through, strangers will be commenting on paint colors and flooring, opening closet doors and peeking into the bathroom. In less than two weeks.
This feels so strange.
I always assumed that we'd already have a new home by the time this happened. That we'd be in escrow and be planning furniture arrangements and landscape alterations on a house in some neighborhood across town, a place that would feel foreign but only a little bit. Instead we're planning a cross-country move to a rental as yet unknown. Cashing out, as it were.
I know some people (and have read of more) who are doing the same thing we are, only they're not moving to a new state, but rather into a rental in the same neighborhood. Why? Bubble, baby, bubble, bubble, boil and trouble. Many people believe we're at or at least near the top of California's absurd house price surge, that there's nowhere to go but down. They may be right. Even Alan Greenspan finally fessed up last Friday that there are in fact local bubbles (he calls them froth):
The Fed chief said Friday that he didn't see a national housing bubble and that the economy was not at risk, an assertion he had also made in February."But it's not hard to see that there are a lot of local bubbles," he said Friday, without specifying these local markets. Greenspan said price surges might "simmer down" as housing became less affordable.
"It's pretty clear that it's an unsustainable underlying pattern," the Fed chief said. "People are reaching to be able to pay the prices to be able to move into a home."
Greenspan hasn't been admitting any such thing until now. In fact, he's the one who's been keeping interest rates artificially low to stimulate the insane buying frenzy, and even urging people to refinance using adjustable rate mortgages so they'd have more cash in their pockets and therefore do more to stimulate the economy. If he's finally confirming the obvious, it means only one thing: interest rates will rise in the relatively near future. And if interest rates rise? Pop goes the bubble. People with those lovely adjustable rate mortgages that allowed them to squeeze into too much house for their income level will fall out of the market. Can't pay the mortgage? Put your house up for sale. Really really can't pay the mortgage? Hello foreclosure. Net result? More homes on the market. A glut of inventory? Prices go down. It's kind of simple, no? Kind of obvious, yes?
Funny thing, though. I keep talking to people who say, "Yeah, I think it'll happen. But not here, not in my little pocket of the city. We're immune." In West Hollywood, we're immune because it's become such a hot area, so desirable, it'll be at the top of whatever market there is. Well, maybe, but if the overall LA market falls, it will fall in this neighborhood too. You can bet your ten percent interest rate on that. They're apparently immune in the Jersey town we're moving to, as well. Because, you see, the Midtown Direct commuter train has made it so very desirable to live there. And it has. Home values there rose the instant the train to Penn Station stopped in town. Good schools and restaurants don’t hurt either. But if the New York bubble bursts? You can bet it's going to take Essex County, New Jersey with it.
There are certain markers when a market's about to switch from favoring sellers to favoring buyers. First, rentals become cheaper and more plentiful. I know this is happening in the New York area. Apparently rental apartments are staying vacant longer between tenants, so landlords have to drop their (still absurdly high) prices. And in our new home-town-to-be, I see the same thing. Lots of rentals available, and the listings linger.
Not only that, but even high rents are nowhere near as high as what you'd pay every month on a brand new mortgage for the same exact property. IE: a modest house in the pleasant neighborhood near Damian's school rents for $3300 a month. A lot of money, yes. But similar houses on the same block are selling for around $1.2 million. Assume twenty percent down. Assume six percent interest on a jumbo loan. You're looking at closer to $6000 a month. Drop that interest to five percent because maybe an ARM will be lower up front, you're still looking at a monthly payment of over $5000, and that's not including tax and insurance. Cheaper to rent than own? You bet.
Another marker of an unsustainable bubble: Housing prices in the hot markets have far outstripped median income. It has to self-correct. As soon as interest rates nudge up a point or two, wham bang crash.
On the other hand, some people say that there's no bubble – though there may be a bobble – and that it's all about supply and demand. More people are moving to cities, causing more demand, but cities are built up already, there's no place for more housing. Thus, a crunch. Thus, prices that go up and up and up. But then how do you explain the plethora of rentals and the wide gulf in price between a monthly rent outlay and a monthly payment on a newly minted mortgage? I agree with the prevailing wisdom: the housing market is overdue for a correction. I just can't see it any other way. The only question in my mind is when it'll happen and how big a correction. Well, and how it'll affect the economy and – okay, I do have some other questions, but I do believe this will happen, this giddy spending spree in California and New York and Washington and Boston and south Florida and all the other hot markets that has gone longer and higher than anyone expected, that it will in fact subside sometime in the next few years and that the money in people's houses right now is more Monopoly money than it is real.
If we loved our house and our city, we'd stay put despite this. It doesn't hurt to live in a house valued at half the price you paid if you have no intention of moving. Who cares what it's worth? It's just a number on a piece of paper. But we don't want to stay. So we go. I'm not one of those people who would sell our home and rent instead just to ride the wave. I'm not that much of a gambler. And we might be mistiming this. Which doesn’t matter, because this is what we need to do and when we need to do it. And we'll figure out a way back into homeownership, one way or another, even if prices continue to rise. But hey, if this adventure does happen to time out so we cash out at the top and then can buy in our new town when the froth has subsided? How cool would that be?
Picking up and moving an entire family across a large continent is no simple thing. Picking up and moving with no certainty of employment at the other end? Raise that complexity by a factor of ten. We have a lot of decisions to make right now. Some feel easy. Others, not so much.
Take our living situation. Two people (one in comments and one in email) have suggested we hold onto our house in LA, rent it out till we're ready to buy in New Jersey. It's the sensible thing to do. It's what we should do, in fact. Housing prices continue to skyrocket. Our bungalow has more than doubled in value in the past four years. How can we sell but not buy again right away, knowing that with prices rising 20 to 25% per year, we could easily be priced out of our new local market? We should either buy right away or hold onto what we have now.
But we can't. We need the money to cushion our transition and ease our stress level the first year or so. I'm not a big fan of equity lines. They're just like Visa debt. You take the money now but you have to pay it back plus interest, giving you yet another monthly bill, another headache. The only way to get that money out cleanly is to sell. And if we buy right away, that nest egg vanishes again, right into a new house, leaving us with too high a burden once again. Because though houses aren't as expensive there as here, property tax is much worse. I did the math before we went east on this exploratory visit. We can buy a pleasant house there, around the same size as our current house but on a much nicer street, and end up with the same overall monthly payments we have now. Which sounds fine but isn't. We may not have any income some months, we may have half the income other months. We don't know how long it'll take Dan to get established there, we don't know what kind of work I'll do and what income that'll generate. We won't be able to afford the monthly outlay we have now. In fact, we need a serious cushion in the bank for hard times. Otherwise, we're looking at debt and fear and despair and man, do I not want to go there.
Besides, what if we hold onto our house and there's another earthquake? After the Northridge quake, house prices plummeted. Even without a shaker to crack prices and send everyone rushing for the door, it's not a sure thing. Most economists think real estate prices can't keep going up. And when they stop rising… well… There was an article in the LA Times a month ago about how people are struggling to get into this insane market. How are they doing it? More and more people are going for the low-interest-to-start ARMs, and on top of that, they're choosing interest-only loans. Translation: they're going to get screwed two ways when the terms change. First: An adjustable rate mortgage WILL go up after the first few years, especially because rates have been artificially low for too long. They're going to go up. And even a point or two could devastate people living on the edge. Second: An interest-only loan means you're not paying off any of the principal. You're counting on the housing bubble to provide equity and planning to refinance when you reach the magical 20%. Well, okay, I guess, but that interest-only period has an end date. And when it comes? Your payment goes up. And the people interviewed in this article all pretty much said, "I did it this way so I could borrow more, I'm stretching to pay this amount." The artificially lowered amount. Which WILL go up. Uh huh. Can you say "foreclosure"? I have a feeling the word's gonna become really familiar not too long from now.
Is this a California-only phenomenon? I don't think so, not entirely, but it does seem to be more pronounced here. And if that's true, then California's going to be hit first and worst by the bubble bursting. Which means if we own here and not there, we could lose big time.
Makes your head hurt? Mine too.
We're toying with the idea of buying, though. But buying a multifamily dwelling. Two to four apartments in one building. We live in one, rent out the other(s). This kind of house seems to cost less than a single family home. If we do it right, we might even be able to have our mortgage and tax nut covered by rental income. Wouldn't that be cool? And that way we're sheltered against a continuing surge in the real estate market. Our home's value goes up with the market, we ride the wave.
But I don't know. From poking around online, it seems like it might be hard to find something we like. Far too hard to do it long distance. Maybe we could rent short term and look around town once we're there. How fast can prices go up, after all? (Don’t answer that.)
I'll admit, the idea of renting feels extremely odd after four years as homeowners. I love transforming a place, painting the walls and changing the fixtures, making it our own. I love that there's no landlord peeking in the windows, judging our furniture and mentally deducting our security deposit. I love the feeling of ownership. I'll miss that dreadfully. And of course there's the risk we may never get that back. If the market stays this out of control. If the bubble doesn't burst after all. If. But man, the equity transformed into cushion is an awfully comforting concept during such a huge transition. I'm not sure we can do without it.
Lots to decide. Lots to learn. Lots to do.
Something you don't see every day: a wall with three colors.
This is called experimenting when you're not sure what color really works with your blue-green tile.
None of these colors passed the "um, no" test.
This one did.
There is, of course, a longer story behind this. But I think it's enough to see the evidence and imagine the details.
This has been a loooonnnnngggg time coming.
A brief historical sketch:
We moved to this house three and half years ago. The kitchen was so dreadful the seller's realtor started suggesting remodel ideas.
We hired a handyman to seal off a doorway and an ironing board closet, also to tear out a horribly placed kitchen island and built-in oven from the 40's (if not before) and the most ominous, block-like overhead THING meant to surround a vent. He left huge gouges in the vinyl floor and strips of exposed plywood where the horrors had been excised, like petrified footprints embedded in rock.
That was March 2003. Nearly two years ago. (You'll find a pictorial of that job here.) We worked hard the next month or so to eradicate the dreary, caked-on paint job (institutional green, in layers) (we stripped and painted, it was a nightmare) (we should have ripped the cabinets out but we didn't have the money). We succeeded, I think.
Except for the floor. Which remained. Torn-up cheap vinyl. Ugly as sin. What to do? Tile? Expensive. Labor-intensive if we do it ourselves, probably rendering the kitchen unusable for weeks. Linoleum? Not as cheap as you'd think for the good stuff. And. Y'know. Linoleum. Oh, and by the way? The lino under the vinyl? Asbestos-laden. 30%, I think it was. That's a lot. So we'd have to hire abatement folk to tear up the stuff. Except the abatement guy? Said if they couldn't get it off the plywood they'd just take up the floor. Yeah. The whole floor. Boards too. And then when Dan called him back to ask another question (ie: what exactly is left if you do that?), the man never returned the call. As in, not ever.
Hmm. What to do?
I'm not a huge fan of laminate. I don't think Pergo looks like wood, I truly don't. But it's far better than lino and half the price of tile. And you don’t have to remove the toxic stuff, just set it right on top. Simple.
And Dan found an Alloc faux tile laminate that looked pretty damned good.
So. Friday. Eight fifteen a.m. Ding-dong, workmen here.
They get right to work:
Laying down the flooring:
And the results:
This has been a tough week.
On Monday, about five minutes after I got my brand new PowerBook (woo!), I got a phone call. From a woman representing the very old and very deaf Russian woman who lives in the single apartment right across from Damian’s bedroom. The one whose airplane-takeoff-level TV listening impelled us to buy soundproof windows for the north side of the house. The one we bought a $200 wireless headset for, then got a translator and helped set it up to use while watching her TV. The one we’ve told the landlord about, a landlord who said, “You shouldn’t have to deal with that!” and gave us the old lady’s daughter’s phone number (she speaks English) so we could complain when necessary. The one who impelled me to the library to check out noise ordinances (I discovered we can buy a meter to measure the decibel level and if it reaches the volume I expect, we can take legal action – and time of day of the noise is irrelevant). That one.
I’d called her daughter on Sunday for the first time in several weeks. The old lady had her TV on at her usual thundering level starting early in the morning and finally at 1 pm after five plus hours of this, I made the call and blessed silence descended.
Monday, not so blessed. Monday, a woman from the adult day care center called. She told me the old lady was crying because of me. Thus this woman (who represented herself as a social worker but turned out not to be) berated me for my unkindness. At great length. I tried to stay calm. I tried to be nice. But I ended up in tears myself because she was so absolutely convinced of my evilness in wanting a modicum of peace in my own house and had no interest whatsoever in finding any kind of middle ground. She told me I should live with the noise or I should move. (I said, “We own our house! You try to find a place in this market!” and besides, we’d just be leaving a horrid legacy for the next owners.) Then she accused me of harassment because I call at all, not because I call too much –I’ve been very polite, discreet, and patient about it and I think I’ve called no more than three times total in the past four months. Harrassment. When she said that, I screamed at her and hung up.
I’m not proud of this. I can’t believe I yelled at a total stranger. I hate losing control like that. I hate letting someone get to me like that. I usually have more of a handle, more perspective, more empathy. But jesus on a pogo stick, we’ve gone out of our way to be nice. And now the old lady’s surrogate is telling me I have no rights here, that she has every right to terrorize us with her noise? I finally broke.
Then, of course, I felt wretched. Because I didn’t feel heard but also because I do hate this situation. Because I do feel for the old lady, all alone in her dismal room, her daughter visiting maybe once every week or two. No friends that I’ve seen. No life that I’ve seen. A sad existence. And I hate making this lady feel even worse. But hell. I have rights too. And she’s violating mine. And so I feel mad and bad and conflicted and I want to cry.
So that was my Monday. Which also involved taking apart Damian’s room and putting everything into the living room in preparation for floor sanding hell on Wednesday. Dan finished the dismantling Tuesday. Not fun.
Then came Wednesday. The floor sanding guy? Didn’t show up. Didn’t call. Our living quarters are upside down and inside out. Damian’s bed is upended next to my bed, making it almost impossible for me to get in and out. The dining table is shoved to the side of the dining room and under a tarp, to boot. Unusable. Living room? You can reach the couch through the piles of toys, but only just.
You get the picture. And then to have this guy not show up? To not know how long we’ll have to live like this? And me already in a black mood?
Not a great week. I was a bit, shall we say, emotional. I may have said and done a few things I regret. It’s sort of like PMS on steroids. The kind of emotional rollercoaster that makes you bawl and want to slug someone and then bawl again.
The aftermath isn’t bad, though. We got another guy in here this morning, a yoga instructor slash wood refinisher slash floor sander. More loud noise today, mostly a steady sort of hum, along with the deliciously clean smell of fresh sawdust. He’s not done with the varnishing part but he’s happy to use Safecoat, a much less toxic version. The floors in Damian’s room and my office look stunning already. And the guy who stood us up called apologizing profusely. He had an explanation or two, of course, neither of which preclude him making a simple phone call saying “I can’t come today, sorry,” which of course he hadn't done. Communication in these things – as in all things – is crucial. Prevents a ton of misunderstanding and hurt.
Best of all, though, I think the old lady finally got the message. Maybe it was okay after all that I cried and yelled. Maybe it finally told her what she had never understood: this hurts us. Her noise level is not just an annoyance, it’s deeply painful. Since Monday she’s started actually using the $200 headset. I know because I was in Damian’s room priming his closet yesterday and I heard the TV sound go on. Then it went off again, less than a minute later. I knew she’d been in there for a while (I saw her toes through the open door). She was changing the battery on the headset. Thus the sudden noise and quick cessation. I don’t know how long this compassion will last, when she’ll decide it’s too much bother after all. But right now I’m feeling bad about being overemotional but also relieved. Sometimes you have to show someone how you feel. Sometimes it’s vastly inappropriate to do so. Sometimes it doesn’t matter, because you can’t control your reactions and you just hope it’ll all come out okay.
Maybe the lesson here – if there is one – is that you can’t always control yourself perfectly. Can’t always be a grownup. But sometimes, if you’re lucky enough, it ends well anyway.
We’ve been house hunting lately. As in: every Sunday making the rounds of open houses until Damian yells “Stop! No more houses!” and then we usually check out two more and let him stay in the car (we take turns running into the house). Also as in: we now have a line of credit to draw on if we should ever, say, need a hefty down payment on a new home. Also as in: every morning I get an automated email detailing new listings and priced reductions. If I have time, I mapquest the likeliest candidates and plug them into the LAUSD school finder and come out with “yes, look at this” or “god, no, it’s right next to a huge boulevard” or “maybe but let’s visit the school first.” And some we look at and some we don’t. It’s like a huge game like Jeopardy or What’s My Line or The Price is Right, only this one is called “Where’s My Home?”
It feels absolutely insane. We’re looking at seven hundred thousand dollar tear-downs and eight hundred thousand dollar “well, it would be nice if it had a back yard and wasn’t so close to the freeway” places. And interest rates are rising and our property tax would double if we do this and after all, we have a perfectly nice house. A workable house. A very pretty house with enough room for us to fit nicely. And new central air, which we’ve been enjoying mightily this summer. But, well…
We started looking as a way to find a better school for Damian. That may no longer be necessary, but we find ourselves compelled to keep looking. We don’t have to continue living here. And after we started looking because we thought we had to, we found out that there are in fact areas of town – areas further west, even, closer to Dan’s job and Damian’s best friends and closer to everything else we do as well and also to cleaner, cooler air – there are these pockets of affordability, of maybe-we-could-trade-sideways. Our agent calls it moving laterally and sighs and says “that’s not easy.” We acknowledge this. And yet…
This house. I love this house. I do. I do not, however, love the neighbors. I also don’t love the concrete block two story apartment buildings. Nor do I love the fact that we are the rich folk on the block, simply by dint of owning our home and yet we are also the poor people in the neighborhood compared to our friends a few blocks over in the nicer part. We’re both too rich and too poor here; stuck in imbalance either way. I do not love the wadded up fast food bags and bits of junk mail we find in our front yard. We are not a trash can. Or the way I have to chase cars out of our driveway. We are not a public parking lot. Or the ancient Russian woman’s louder-every-year Russian TV that comes through even our soundproof windows on the north side even though we paid for a headset-for-the-deaf for her and have talked to her landlord about it and even have her daughter’s phone number. (Last time I called, she said “Are you sure you’re hearing my mother? That can’t be my mother.” But it was.) Or her counterpart two apartments down; less ancient, plays TV less often, but probably cranks the volume even higher. Or the very sweet (now that they’ve stopped parking in our driveway) multigenerational African family who nevertheless have high-volume conversations from the balcony to the front gate at eleven p.m. Or the booming Ukranian music coming from the front upper apartment on the south side.
You get the picture, I think. Or rather, hear the echo. It was a good move to buy this house. I don’t regret it. It’s appreciated in value quite nicely, and it enabled us to stay in a neighborhood we knew well; this stability was important when we were also still in the throes of Damian’s various therapies (he was just three when we moved here, barely verbal and still very withdrawn). But this is not a forever home for us.
Our next house may not be for forever either (that whole lateral move thing) and it probably won't be as pretty but we need for it to at least be a place where we can say, “Okay, our finances haven’t gotten better so yes, we can in fact stay here, we’ll just take out a line of credit and make a few adjustments to the property.” We can’t do that here. Not without clawing our eyes – and ears – out. Because you can’t take out a line of credit to buy up the neighboring buildings and bulldoze them to the ground. They don’t make equity lines that big.
This is a three-to-five-years house. We’ve been here three years. It’s time to look around, see if we can find something else. Maybe a smaller house we can eventually build on to. Maybe a house in a less hot neighborhood but one that’s pleasant and quiet. Maybe a house that could use a bit of updating but that we could do over time, bit by bit, just as we have here. I don’t know what we’ll end up finding. I just know we have to look. So expect stories from the real estate front lines, stories of strange houses and stranger realtors and finally – whether in a month or a year (or more?) – yes, a home to love.
It’s time to go shopping.
A friend of mine says the real estate market is at its peak right now. That we should sell and wait to buy. That we should ride this wave right into a fabulous new house when the wave crashes and leaves us high on the piles of money we’ve saved.
And maybe she’s right. I know of people who are doing just that, renting and waiting. And maybe they’ll clap their hands in glee when the time comes, chortle at the rest of us fools who stayed put as they waltz into their tacky mini-mansions with marble floors and fancy multi-tiered shower heads in shower stalls the size of our current bedroom.
But maybe she’s wrong and those people are going to grow old in their rental apartments while the housing market continues to grow ever more unaffordable and then we’re the ones laughing or at least not crying as we can afford to, well, jump from one decent-but-not-ideal house to another.
I can tell you reasons I think she’s wrong. I can justify my position. But of course I don’t really know. And I think it comes down to something very different. It comes down to this: How much of a gambler are you? This isn’t just playing the stock market where if you lose money, it’s not money you were actively using. But your house? Your house is ideally your home base, your sense of place and belonging. So to give up a house that’s not just a piece of financial property but is a real three dimensional yard-and-living-room-and-kitchen, is where you nap and play street hockey and have knock-down drag-out-fights and cuddle under a throw blanket on winter nights watching TV together, to give that up in search of some theoretical but not solid monetary gain, that’s a big deal. You have to be able and willing to gamble, not just with your money but with your day-to-day life.
I’m not.
We do want to move. Probably soon. Within the year, I hope. But we want to know this will be somewhere we can stay for a while, for as long as need be, that it can change with us as we change, that the walls around us can absorb our memories and our lives. That it’ll be ours.
I realize home ownership is a luxury. I do know that. I lived in rentals most of my life. Until three years ago, in fact. And that was largely fine, and I think back especially on the apartment where I grew up and feel great nostalgia and an intimate kind of affection. You do own a rental in a sense too, because it too is home. But I find myself loathe to give up the knowledge that this structure is mine and nobody is going to kick me out, even if I paint the walls fuschia and have loud parties. I like the emotional security in that. And so I’m no gambler, not in this. When we sell this house, it’ll be because we’ve found another, not because we’re waiting for the gold rush.
How is it possible that one small room (so small it doesn’t even fit a closet, so small I wonder if it would even fit a bed) can take three DAYS to prime? Two coats of primer, covering walls and ceiling. Three five hour days. Fifteen hours of sweat and strain.
I don’t get it.
I’ve got primer under my fingernails, on my elbow, splashed on my ankle, probably in my hair and on my teeth. I’m bone-tired. And the room is primed but not painted yet.
I see why people hire painters.
I think I always feel this way in the midst of a big project and conveniently forget by the time the next one rolls around. And I probably will have amnesia next time too. But for now, I’m really fucking tired and covered in white, to boot.
If you ignore your leaky roof for, oh, seven or so years, letting the rain come in through the progressively uglier cracks in the ceiling, if you paint the walls a murky institutional green but with a latex paint and no primer over decades-old oil paint, if you do all this and then add the insult of spray-on acoustic foam with disco glitter, such a classy touch, if you do all this, you will be remembered. Oh yes, you will be remembered. When the people who buy the mistreated beauty of a house from you, when they put on goggles and cover their noses and mouths and spray water on that acoustic popcorn and scrape it off, the mud falling on the floor as if an unusually prolific pigeon on steroids is taking an extended dump, falling onto the drop cloth and also falling in sprays of splattered glitter into their mouths and eyes even through the goggles and the mask, when they scrape all that off and discover cracks so discordant, so huge, a bat could fly into the attic and up onto the roof through them, when they fix the cracks and prime the ceiling only to discover the glossy white primer, the fixer of all evils, will not stick, no, will not adhere to that thin latex coating or rather, it will in fact stick to the latex and will thereby pull that ugly minty coating off the oil-based paint job underneath it, pull it off in long bubbling strips, huge scabs of ceiling paint now on the floor along with glitter and mud and plaster in one big pool of wrongs made right. Oh, they will remember, the new owners, as they curse your names, your heritage, your bland remembered smiles and the travesty you perpetrated on an innocent house.
Know this. Your house has a very long memory. And it will tell tales. Oh yes, it will tell of inglorious deeds in all their gory details. Do not fuck with your house.
Let’s say you live in a hot realty market (Los Angeles, for instance). Let’s say you own a house. And you thank your guardian angels that you bought when you did, else you’d be priced out and still renting when you’re eighty nine. But still. You want to sell someday, even someday soon, you want to sell and buy a nicer place or, well, not nicer maybe, but in a more peaceful location, somewhere you'd want to stay for a while. But you don’t have wads of cash stuffed under the mattress or between the couch cushions. So you need the profit from your house sale to buy another house.
These days, the market’s so hot you need to prove to any prospective sellers that you’ve got immediately accessible cash for the down payment – we’re talking over a hundred thousand dollars here – plus a piece of paper from the bank that says you’re pre-approved for a loan for the rest. No way will you get a house if you say “Well, I’ll buy your place if and only if I sell mine.” That kind of contingency only works if they need your offer. And they don't. They have two or three or thirty others to choose from. This is very much a seller’s market. If you want that new house, you have to make a hard cash offer.
But if you sell before you buy – which is how you’d get that cash down payment – then you have to buy a place pretty damned quick. Otherwise you end up renting while you continue looking. And while the market continues rising. And while your equity-built nest egg that looked so sizeable six months ago might buy you a rundown shack alongside a freeway. But who can buy a house that quickly when there’s so little housing inventory? I mean, this isn’t a sweatshirt, this is your future home. You can't just pick up the first for-sale item on the shelf, y’know? It could take months to find the right house. Maybe a year. Prices can rise 25% in a year. That’s what they’ve been doing around here. Sell before you buy? Not so smart.
So what do you do? How do you cover yourself in the gap between here and there? Well, this past Sunday a realtor gave me the answer and yesterday another confirmed it. It’s simple, really. You take out a line of credit on your current house, one that’s big enough to cover the down payment on a new house. You don’t actually use the equity line; it lies dormant until you need that money for an actual payment. If you draw on it just after your offer is accepted but just before you enter escrow, you've found the sweet spot. The trick is that you have to take out less than you think your house will sell for. You have to leave yourself a cushion in case you’ve screwed that calculation up. That’s the scary part, making sure you find that middle ground.
Then you get pre-approved (even if it means showing the loan company a somewhat, um, non-traditional rental agreement wherein a friend signs on as your renter for the minute or two you’ll need such a person) and you’re ready to rock and roll. Or at least go window (and door and living room and back yard) shopping.
So simple. Borrowing from your present to pay for your future. Almost elegant. Of course, the real trick is finding that elusive next home to bid on. Equity line trickery won’t help with that.
After reading posts like this on Apartment 11D, I’ve realized that, duh, Los Angeles isn’t the only huge urban center that’s still in the midst of an absurdly inflated real estate boom. And this article in The Washington Monthly (link via Scalzi) confirms it: New York, Boston, San Francisco, Seattle, Los Angeles… prices are out of control. The question that still hasn’t been answered anywhere: is this a bubble? Will it burst or keep going up and up and up until only millionaires will be able to afford even one room shacks and everyone else will be relegated to rentals? But if it bursts, what then? It sounds so simple: wait until prices settle, buy then. But if prices go down, there’s one reason for it: rising interest rates. Which means you’ll have the same outrageous monthly mortgage payment, only more of it will go toward interest and less toward principal.
So what, right? At least it’s no worse and maybe it’s better, because less money is, after all, less money. Easier to come up with a down payment, easier to handle things like property taxes, which are proportionate to the cost of the house. But that’s looking at the micro, the individual. You. Not the bigger picture. The us, as it were. And the us here is about to be in big trouble. We went to see our tax guy for our yearly appointment two weeks ago. He said he’s making sure he refinances his house to lock down a fixed rate before November. Because he – along with everyone else – says rates are not going to rise before the election. But after? Well, nobody knows for sure, but it’s been artificially low for so long, yeah, probably so.
Here’s the thing. I read an article in the LA Times shortly after the one I linked to. This one was about how people are managing to buy those overpriced houses. How? They’re grabbing the lowest interest rate around, a/k/a adjustable rate mortgages. They're taking zero down mortgages. They're playing with numbers and praying it all works out, that rates stay low and prices keep going up. I'm not one to judge. We did it ourselves three years ago. Zero down, the whole deal. And we got lucky.
But for these people? What if the market really is at the top now? I can't see it going much higher and I can easily see interest rates soaring, and soon. These people can just barely afford the payments on those $700K thousand square foot bungalows as it is. What’s going to happen when those payments balloon? They say rates go up faster than they go down. What happens when your bill goes up by fifty percent and your property value simultaneously plummets? It means your equity floats away on the wind so you can’t even recoup if you sell and you certainly can’t obtain a credit line – and even if you could, how would you pay it?
Add to that the huge numbers of folk who have refinanced to take money out of their houses, to cash it in while the cashing's good, and who therefore also probably now have ARMs instead of fixed rates and who have bigger monthly payments because that extra money they took out? Not free. And then rates go up and they too are underwater with minus equity because they spent it already in the expectation of continually rising prices. What happens to those people?
What happens is foreclosures here, there and everywhere. What happens is an economy even more in the toilet. What happens is ugly. We moved to LA a month before the Writers Guild went on strike. The strike lasted months, delayed the TV season, scuttled dozens of film shoots. People foreclosed, people went bankrupt. And not just in the film business. Restaurateurs. Hairdressers. Accountants. There's a ripple effect when large groups of people who are used to having -- and spending -- money don't and can't anymore. Imagine that on a national scale, and no strike settlement on the horizon to fix the problem this time.
Scary stuff. We’re refinancing this month, locking in a fixed rate mortgage. I want to sleep at night, y’know?
Our living room as of today. Good morning, sunshine.
Color is a trickster god. Luscious, seductive, sucking you in, making you go buy a quart of paint in that color, yes, that chip, yes isn’t it so lovely you could eat it out of the can? And then when it’s got you in its clutches, it’ll turn around and bite you in the ass.
I painted the living room this weekend. It was a lovely shade on the chip. Palest sunset, it was called. Isn’t that evocative? The hint of orange to warm our walls. It was just a hint, all right. I’d call it white with diluted homeopathic essence of yellow-orange. I’d call it palest off-white maybe-cream-if-you-want-to-stretch-the-truth. Nice color, I guess. If you’re looking for white. But we were looking for an orangey-yellowy sort of color. Not too dark, the room is dark to begin with. Not so strong, we can’t overpower the beautiful wood built-ins. Something soft and cheering as you walk in after a long drive home.
Color is an odd sort of beast. Pick the wrong one and everything in the room seems off. The color seems pasted on, too garish or too mild or too dingy or just plain tacky. The room itself takes on an aura, stops fitting together, as if it suddenly broke, realigned, misconformed. How do you find the right one amidst all the hundreds of chips on the color wheel?
I’ve talked about this before, but we saw a place three years ago while we were house-hunting. The house itself was small. If you stepped back to analyze the room layout and built-in details, it was not unlike many other Spanish style houses in the area. But the way the owners had painted and landscaped and decorated, oh. Everyone who walked in wanted to buy the place. And yet. They chose absurd color combinations, a wall sponged with not two or three shades off the same color chip the way you’re supposed to, but half a dozen different colors, all jumbled and splattered on top of each other. The effect was oddly soothing. They painted stripes on the hallway wall, not complimentary colors either. Peach and green. Ugh, right? But no. The green was soft and just right and the effect of the two together? Delicious.
I walked away from that house – I think we both did – feeling inspired. We can do that too. We can mix and match and sponge and marbelize and paint diamonds on the walls. When we have a house, of course. Because we didn’t put an offer on that one. It was, after all, too small. And too perfect unto itself. Not a house we could claim as our own, put our imprint on. But we were thrilled that someday soon we too could do that.
I see other houses, too, friends’ houses. They have deepest red on the walls in one room, deep green in another, intense yellow in the kitchen. The effect is invigorating. Maybe we could do that too, I think.
Well, we can’t. Because this house we have, it won’t let us. We managed to slip a deep blue onto two walls of Damian’s room. It seemed to know that was a kid’s room and so it let us. But we tried medium purple on the kitchen moldings. No go. And every time we try to imagine a strong color anywhere else, it says “No” and “Don’t you dare.” And so we don’t. We bow to the house’s superior knowledge and grandfather’s wisdom (it is, after all, ninety one years old) and agree to treat it gently with only the softest of colors. A pale sage green in the guest room, cream walls in the kitchen (with pickled orange cabinets and those muted purple moldings, not the typical definition of conservative, I know, but trust me, it’s hardly a Technicolor daydream). And the living room, a pale orangey yellow. The color of sunshine, ideally. The sun this shaded house rarely gets.
At least that was the plan. But we went too conservative in this case and the color was very nearly white. And the off white room was sallow and unpretty, like a hungover starlet without her morning makeup. We thought about living with it for a while, seeing if it grew on us. We worried that anything darker would be too much, too bold, too strong. We went out and bought another quart of paint anyway. This one called Warm Rays.
I painted. Again. Two coats of primer over the holiday break. Two coats of Palest Not A Color this weekend. Two coats of the sweetest warmest orange-hued yellow yesterday and today. My shoulder hurts with repetitive stress, my arms are spattered with a fine coat of latex, but the room is so very pretty. It just woke up from a long winter nap. It’s come alive.
The right color seems like it’s been there on the walls forever. That’s how you know when you find it.
(Photos tomorrow, if I can.)
First you pull a tiny bit off from around the hole in the wall where the doorknob bashed one too many times. It peels right off like a bandaid off skin. Then you get cocky and yank it down, figuring it’ll come too in a nice long strip. Which it does. So does a dusty shower of ninety year old plaster.
You go away. Pretend it never happened. Yeah, so the wall – your living room wall, the room you pass through several times a day, that wall – so it now has a big patch of bumpy whatever-they-used-before-sheetrock grey wallstuff sticking out amongst the dingy gold-and-brown curlicues of great-grandmother era wallpaper. But you can overlook that, right? So can everyone who comes in. Right?
You peel a little more. You can’t help yourself. You have to see if this wall is a disaster in the making, a skim-plaster and sand-down hell of a winter vacation. So you peel and lo! Smooth beige plaster. The wall, clean.
Days go by. He says oh no, he says let’s wait. He says we have people coming over, let the wall be almost-normal, okay? You nod, you agree, your fingers itch every time you pass by that wall. It’s like walking past bubble wrap without popping any, walking by a bowl of nuts without grabbing a few. It’s torture.
One morning. You have a cold, you sniffled all night. Your resistance, your willpower, they are low. You kiss your son and spouse goodbye. You close the door. You slip your fingernail under the edge of wallpaper. You pull. Your mother comes over. “Are you taking wallpaper off?” Who, me? Nope. Not me. “Can I help?” Oh. Yes. Absolutely.
Two hours later, two hours of persuading thick wallpaper edges to part with their supporting walls, two hours of broken fingernails, bruised fingertips, happy screwdriver discovery (slips right under those corners), the long, satisfying pull when a whole strip tears off with a loud sigh, two hours of the kind of work one probably should not do while one is convalescing, after that kind of two hours, the wall is almost denuded of that gold-turned-drab, that thick coating. It’s almost ready for its close up: prep and paint. After ninety one years and two hours.
You go take a nap.
A funny thing happened yesterday. I wouldn’t write about it normally because whenever anything good or potentially good or maybe-will-someday-pan-out-and-be-brag-worthy happens, people always tell me to keep it quiet till it’s solid, as if somehow I’ll jinx it by talking too loudly too soon. But then it never does happen, it slips away like sand through my open hand, and I never got to enjoy the thing in public after all, because news that never goes anywhere is no news at all. So this time I’m going to write about it up front. It’s highly improbable and I expect it to go nowhere, but that makes it more fun to think and talk about. No stress, no bated breath. Just “hoo” and “hee” and maybe “ha.”
So the funny thing, not a big thing only it could maybe become one, is this: we had someone install a backup sensor on the new car, our honking big minivan. Seemed like a good idea to know what we’re about to crash into, you know? The guy who came by is the owner of the company, a fifty something dapper gentleman, his Australian accent colored with a European undertone. He and I talked as he worked. He told me some of his life story. People have started doing that lately, for some reason. When he started drilling the rear bumper of my shiny new metallic baby, I couldn’t watch so I went inside. He called me (literally, called me on the phone) when he was done. I came back out. He demonstrated the system. It worked. Nice. Then he asked, “Are you thinking of selling your house?”
Huh?
Turns out he likes this neighborhood, often goes to the music shops up the street. Lives in a more suburban area near here, would like to move. His wife works downtown so they can’t go too far. He’d be interested.
Whoa.
I brought him inside to take a look around. He didn’t respond to all the lovely exposed wood, which was kind of strange because everyone does. But if he’s in buyer mode it doesn’t behoove him to, right? He has to be cagey. We talked a bit more. He wanted to know what we’d ask for the house. Hell, we haven’t put it on the market, how would I know? But I told him what a house a few blocks away is listed for and how it has plusses and minuses (a few hundred square feet bigger but no yard and no gorgeous built-ins) but is fairly equivalent as they’re both butted up against apartment buildings. I said I don’t know that we’d ask that (a phenomenally absurd price, if you ask me) but maybe a bit less (which is still in the realm of the absurd but I know another house nearby that sold for that last month). He didn’t bat an eye. I said I’d have to talk to my realtor before setting an exact price. He said yes, and he’d need to talk to his realtor, run the comps, get a sense of prices in the area. He’d also need to bring his wife by, see if she’d be interested. Maybe this weekend, he said.
This is weird.
We’ve wanted to sell since we moved in. It’s a lovely place, 1912 California Craftsman, well preserved, and I adore it. But I hate the neighbors, all apartment dwellers, no respect for our property, and loud to boot. It’s not a forever house. We’ve been working to upgrade it cosmetically (rip off shit-ugly wallpaper, reconfigure the kitchen, add skylights to the dark living room), doing as much of the work ourselves as possible, and then we’d always planned to put it on the market. But lately we’ve worried, because housing prices are insane all over this city. How can we move? We can’t trade up and if we trade laterally, aren’t we ending up in a similarly bad situation, tiny house or terrible neighborhood or in the boonies or next to a freeway? Why bother? Our personal compromise, though not ideal, works fairly well. We’re in a good (overall) neighborhood, the house is the right size and configuration for us, it’s conveniently central. And it’s such a pretty house.
But I started looking on the MLS last night, jumping up about 50K in price from what I’d been considering. If we sell for the price I suggested yesterday, we could make a damned good lateral move. We could move west to an area we like better, with a better elementary school and houses all up and down the tree-lined block. And yes, I think roughly the same size house.
We could put our house on the market if this guy falls through. And we might, but first we have to finish the cosmetic fixes. And it’s work, having people tramp through. And we should find a house to buy first, because we’re picky. But we won’t know what we’d get for ours so we’d be guessing what we can afford. And that’s not good because we might get in too deep but also because we might get rejected because our down payment is still theoretical until we sell and in this seller’s market, you need cash in hand to buy. But if we sell first, will we be able to rent-back from the buyer or will we need to move to an interim rental home while we look? And how do you find those when you’re wanting to sign a short-term lease?
Selling to this guy would solve a lot of problems. We’d have a solid buyer at a definite price but someone who could wait for us to find a perfect new house. Money in the bank.
If it happens, it could be very cool, but I don’t expect it will. The wife might say “Are you kidding me???” and drive away fast. The realtor might say “Offer this and no more” where this is too low for us to go anywhere. Or the guy might get cold feet and not say anything to anyone. Maybe he already has, maybe he drove away thinking “What was I going on about back there?”
One way changes everything, the other way doesn’t. But I’m already in the doesn’t place and I’m fine with that. So no bated breath here, just an “it could be” musing. And no matter what, it’s still cool. Someone moseyed on by and thought about buying my house, out of the blue. What a funny thing.