3/10/2011

03-10-11 - House Contemplation

Well, I'm thinking about buying a house. Property values are plummetting fast around here. I think they have a ways to fall still, but asking & selling are starting to come together a bit (for the past 2-3 years there's been a huge gap between initial asking price and final sale price as people refused to accept the reality of the situation). By the time I get my shit together and actually buy in 6-12 months it should be a nice buyer's market. And interest rates are super low and I have a bunch of cash that I don't know what to do with, so that all points to "buy".

On the other hand, it sort of fucking sucks to live in Seattle. I feel like I've explored most of it already and I need a new place to explore. The countryside is really far away here; it's weird because you think of Seattle as being a beautiful place surrounded by mountains, but it's actually one of the most difficult places to actually get away from civilization that I've ever lived. (eg. downtown San Francisco is much much closer to real countryside). Here, you can get out I90, but the I90 corridor really actually sucks, there are zero country roads going off the freeway, and all the hikes are straight up the valley within earshot of the freeway (the thing that doesn't suck is backpacking, when you get far enough in to Alpine Lakes or whatever it's fantabulous). To really get out to country roads and wild open spaces you have to drive 3-4 hours from Seattle, up to Mountain Loop or across a pass, or down to Mount Rainier, something like that.

There's nowhere to fucking bike except Mercer Island over and over (unless you drive 2+ hours, and even then it's not great because it's very hard to find good country roads around here, the ones within 1 hour are generally narrow, trafficky, and pot-holed (eg. Duvall, Green River Valley); I think probably Whidbey is the best spot within 2 hours). And even if there was somewhere to bike it would be raining.

The gray horrible winter is also a sneaky bastard. I find myself starting to think, "I'm used to this, I can handle it" , but the thing I'm not realizing is that I'm just always constantly slightly depressed. It seeps into you and becomes the new norm, and humans have this way of habituating and not realizing that their norm has been lowered. All winter long, I don't laugh, I don't play, I don't dance, I don't meet new people or try new things, I sleep in and eat too much sugar and drink too much booze, I'm just constantly depressed, and I think pretty much everyone in Seattle is, they just don't realize it because it becomes their baseline. You only realize it when you go on vacation somewhere sunny and it's like somebody just lifted a weight off your head and you're like "holy crap, life doesn't have to suck all the time! who knew!?"

And of course the people in Seattle are fucking terrible. Passive-aggressive, busybody, uptight, bland, ugly, pale, pastey, out of shape, unfashionable, slow-driving, sexually timid, white-bread, unfriendly, cliquey. I'm sure whatever house I move into, the neighbors will watch through the window and raise their eyebrows disapprovingly at various things I do. Capitol Hill is by far the best part of Seattle because it's full of The Gays and people who have moved here from out of state, and that's a better population. (in general, the new-comers are almost always a better population than the old-timers; it's generally a better portion of the population who moves to a new place looking for adventure or their fortune; that's why everyone in CA is so beautiful, it's why the West in general is better than the Midwest, it's why America used to be so great and why our closed doors are now hurting us; it's so retarded, of course we should allow citizenship for anyone with a college degree, we would basically steal all the best people from China and India, though it may already be too late for that move).

Okay, Seattle rant aside, I'm still considering it, cuz hey, I'm sick of fucking renting and moving, I want to be able to do what I want to my own house, and you have to live somewhere, and the jobs up here are really good, and if you lock yourself in your bedroom and watch TV all the time it really doesn't matter where you are.

It's pretty insane to go back and look at the property records for sale prices over the last 15 years or so. ( King County eReal Property Records and Parcel Viewer ). For example one house has these sell values :


3/11/2010   asking 500k (sale probably less)
3/23/2006   $739,000.00
1/08/2002   $215,302.00 
1/27/1997   $130,000.00

N found the most insane one :

03/11/2010  asking 475k
05/18/2007  $605,000
10/31/1997  $30,500  

Whoever sold in the bubble sure did well. Assuming they took the profit and moved to The Philippines or somewhere sane.

The other reason I'm thinking about buying is this area around where I live is in the process of gentrifying (see, for example: recent graffiti attack) and I think there's a decent chance to strike lucky. Of course the big percent gain from that has already happened - that's why the prices above have gone so crazy - they were in very poor, crime-ridden, black neighborhoods, that have already semi-gentrified and cleaned up quite a lot. But it's still a bit grungey around here, and only half a block away the real wave of yuppie motherfuckers is marching forward like a khaki tidal wave. The hard thing about the gentrification wave is timing, it can take 50 years

Of course the whole idea of individuals "investing" in the home they live in is retarded and is a real sickness of the last ten years. I have to keep myself from getting swept up in that "norm" (when everyone around you is saying the same wrong idea, it's easy to forget that it's shite). Actual real estate investors invest in lots of properties, not one, and they generally invest for income, not appreciation. And of course home value appreciation is only income if you actually move to a much cheaper place when you sell, which hardly anyone actually does. Unfortunately this belief causes homes to be valued at prices that don't make any sense if you don't believe that it is an "investment".

Anyway, there are two really bad things about buying a house :

1. Transaction costs. They're absolutely absurd. 3-5% !? WTF !? For what? The realtors and mortgage brokers and so on are the only ones really making money long term on housing. Anyway, in the modern era of the internet, there is absolutely no reason for this, I can find my own damn house, I don't need an agent, and I can get my own damn online mortgage. But as usual in the modern "high efficiency economy" the new electronic service providers are doing much less for you, but not actually charging much less. (consider things like Kindle, iTunes, online customer service for banks, etc. , the modern economy is all about reducing producer costs, giving you much less service, and charging roughly the same amount).

2. The seller's information advantage. This is the same thing that fucks buying used cars. The seller may know things about the house that they aren't telling you, and there may be things that are basically impossible for you to know, like once a year a 200 mph wind blows away all the soil. Or the house next door is a death metal band's practice space, and they just happen to be on tour right now. Whether or not you actually get fucked by the information inequality, it costs you an expected $10k or whatever on each transaction.

9 comments:

jfb said...

Hike along the AT and see which areas you like. :) Tennessee's nice as well.

No jobs most places but you could probably get tons of contract work on the net and live wherever you want.

As for the Midwest, land is cheap and plentiful, things grow when you put them in the ground, etc. People like to criticize but the 'flyover' sentiment helps keep speculators out..

cbloom said...

I drove through the Smokeys around NC, Tennessee / Virginia, and it is absolutely gorgeous. Pretty severely countrified though.

If you don't care about the weather, there are lots of parts of the US that are beautiful for at least part of the year (eg. Idaho, Wyoming, Montana)

billyzelsnack said...

In Iowa it is against the law to buy a house without using a buyer's agent or a real estate lawyer.

cbloom said...

@billy - sick.

It's like how you can only deduct your previous used car value from sales tax on a new purchase if you use a licensed car dealer.

jfb said...

In a situation like that, I wonder if it'd be viable to start a cheap middle-man service that just facilitates sales between two people who are already going to sell.

Automate it as a website, get that 'license', charge $5 a car sale to pay for the site...

Of course, the people who got that law in would no doubt just lobby for another one to keep you out if you did that. Ah, rent-seeking, how I do hate thee.

Tom Forsyth said...

You should probably at least try renting out of town a bit to see if you loathe it as much as you loathe living in the center. That way you can make an informed decision on which particular type of eternal depression suits you best before you spend a ton of money. At the very least you can deal with the problem of neighbours.

ACSintheUS said...

I concur with all of this, Seattle winter is soul destroying. It was even worse to read 'cos I'm in California and you just reminded me I have to soon leave 70 degree weather to return to it probably hailing or some shit. Fuck.

And I already own a house in Seattle. Double fuck.

...that said, I'm down here helping a friend look at houses in the bay area "for 400k or less", which is fine if you don't mind living in an ex-meth-lab.

Thatcher Ulrich said...

I would absolutely hire a real estate lawyer to close on a house, regardless of what the rules say. Also if you're getting a mortgage I think the bank may insist on it.

Re the agent -- if I were selling my place in NYC I would not hesitate for a microsecond before hiring an agent. The good ones will net you more money in the end, and shield you from the buyer neurosis-storm that is involved when people (couples especially!) are contemplating plunking down their life savings and future earnings on a new home.

On the buyer's side, if you are decisive and well-informed the agent probably isn't such a great deal except they also shield you from the crazy or incompetent seller.

The only cases where the agent is a lose are where the agent is lazy or incompetent, or where BOTH the seller and buyer are sane, realistic, and efficient. Incompetent agent is the one to look out for.

I don't think I would hire a buyer's agent unless maybe I was moving somewhere really unfamiliar.

cbloom said...

Yeah, real estate lawyer for buying seems to be the way to go.

old rants