In the winter wonderland that was my zip code yesterday afternoon, we travelled to a foreclosed house. It was purchased eight months ago. The foreclosed house is next to a house that took fifteen months to sell. I wonder what made the April 2007 buyer confident the house would flip. I notice flippers in our area rarely do their homework about how long houses take to sell.
We counted six houses for sale on our way back. We had travelled eight blocks. I have no ill to speak of houses selling in winter: the magic winter week mortgages dropped down to 6.625% APR we and two couple-friends of ours all bought. That was back in the days when PMI was slapped on mortgages made with downpayments smaller than 20%, and when buyers commonly had lawyers review the paperwork. So now we're thinking "if you can't afford a fixed rate of 6.625% for 30 years, you can't afford the house." I bet people 35 years older than me are thinking "if you can't afford a fixed rate of 5.6% for 20 years, you can't afford the house." Does anyone remember when mortgages were commonly ten to twenty years long? Do you think modern-day home borrowers are thinking "if you can't afford a 5/1 ARM with 0% down, you can't afford the house"?
The spouse and I spoke of the REIC term "starter house." We live on a block where many people who voted for Stevenson or Eisenhower are still in their "starter homes." I posited that one gets a smaller mortgage or a shorter term when one "upgrades" to another house. Otherwise, what is also being "upgraded" are property taxes and mortgage payments. If I could cut my energy costs and reduce the total principal and interest of what I'm currently paying by 20%, I would "upgrade" to another house.
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I'm thinking about multiple streams of income in my 100-day break. I'm also thinking of taking another job, perhaps a full-time permanent one in the city so I don't have the hourlong commute. I see that people here get paid for surveys. A friend suggested waitressing but I don't want to be on my feet for that long. I'm still considering selling my books and stuff -- dematerializing. Might as well get a jump on the "Yard Sale Economy."
My friend challenged me to live off one income without touching my emergency fund during my break. It's true that on my last 100-day break I took only one week of unemployment insurance.
blather
December 26th, 2007 at 10:30 am
December 26th, 2007 at 11:06 am
The whole concept of a "starter home" is relatively recent. People have become convinced that they need to move to gradually larger and larger houses as soon as they are able to swing the payments. This is absurd. Our house is bigger than the homes that either of us grew up in (and there are only 3 of us - I was in a family of 4. My wife was in a family of 5). Sure, we'd like more space, a spare bedroom, a larger kitchen... but we have absolutely no plans to move unless our neighborhood goes downhill at some time or we decide to relocate.
December 26th, 2007 at 11:21 am
Maybe Lowe's and Home Depot will make a comeback when people are trapped in their "starter homes" thanks to irrational house prices and limit their "upgrades" to finishing the basement and renovating the kitchen so new cabinets can allow space for the larger energy-efficient refrigerators.
December 26th, 2007 at 12:02 pm
When we first bought (in winter!), my husband's partner said something about this house being our starter home. I had a reaction of repulsion at the assumption that surely we would want to move to something bigger, better, and suburban. We have so much going for us right here. We chose this house for good reasons which remain good.
I did grow up in a house with 3 full bathrooms and 5 bedrooms, but it was not nearly so big as those built recently. Back in the 1960's and 70's people thought our house was huge. Not anymore. We were 8 people in the house, at one point 9, when Gramma lived with us. Some of my sibs now live in houses bigger than our childhood home, but with only 2 or 3 people. None of them can walk to work, worship, the grocery, school, restaurants, dentist, bike shop, hardware store, bank, drugstore, barber shop, laundromat, car parts, cutlery shop, jewelry shop, deli, bakery, insurance office, lawyer, mechanic, etc. They cannot walk to any of these places. How inconvenient.
December 26th, 2007 at 12:07 pm
December 26th, 2007 at 05:39 pm
Thanks for the laugh. Be sure to stretch first. Wouldn't want you to hurt yourself.
December 26th, 2007 at 08:00 pm