Since my last post, guess what DH & I did? We closed on our new house and moved!
For anyone who doesn't know the story, this has been a long time coming. We sold our house in the Seattle area over 3 years ago, and have been living in rentals both in Seattle and in Austin ever since, waiting for what felt like the right time in the market and the right house.
I can't tell you how nice it is to be back in a place that we own!
The first time we drove by the house it was literally one of those "Honey - Stop the Car!" moments that you hear about.
Is it possible to be in love with a room? If so, I may be in love with our new kitchen:
This picture is rather stark without any furniture or pictures, but I wanted to show the curved walk-throughs, which is one feature I really like. (I like soft curved things rather than just hard corners.)
These are old pictures that we took when househunting. I would have liked to have posted some newer ones, but my camera is still in a box.
At one point in the process (just before signing off on our contract), DH started getting a bit of cold feet. There are homes in the same neighborhood that are built by lower quality builders that of course sell for less per square foot. DH started thinking we should go for "lowest cost per square foot" and get a bigger house, but at that point I really put my foot down and rather insisted that quality was much more important. It may be a "smaller" house (at least compared to the others), but I know we will save not only money but also time & aggravation in the long run. It's an Energy Star and green built certified home, so we will save on our energy bills. With the quality of the materials, we should end up needing to repair or replace things much later. I hope Ima Saver will be proud of me for insisting on quality! (I'm not saying it's the quality of a custom home that Ima's husband would build ... it's not, not by a long stretch!)
Closing was a dream. Took all of 30 minutes.
The first thing I did after getting home from the closing was file our property tax appeal. The deadline to file was June 1st so procrastination was not an option!
Moving was fine, but boy were DH & I tired by the time we were done! I have told DH in no uncertain terms that this is absolutely the LAST DIY move for us. Fortunately, there really wasn't a lot of furniture (just our bed and a couple chairs and a small dressers & side tables). If we ever move again, we will just have to hire movers. Honestly, I wouldn't mind if this were our last move EVER (until we move to the retirement center or wherever we end up in our old age).
We continue to stimulate the economy with house related purchases. In addition to the appliances blogged about previously (fridge, washer & dryer), we have purchased a carpet cleaner, a lawn mower, and garage floor liner. I've also ordered a shower caddy & a sofa.
Bless Discover's fraud department --- Usually I only buy gas on that card, so when the garage floor liner was purchased, they immediately called me about "suspicious activity." Nice to know someone's looking out for me!
Viewing the 'House Hunting' Category
Since my last post, guess what DH & I did? We closed on our new house and moved!
OTA = Over The Airwaves
This is the "free" TV that is available to anyone with an antenna. This is the type of TV anyone my age or older grew up watching.
A move is such a great way to re-evaluate lots of things in your life. In addition to evaluating what things we really want to keep (as in, "Do I really want to lug this ratty object to the new place, or is it time to ditch it?"), you also start evaluating services and weighing the costs vs. benefits.
When it came time to order utility hookups at our new house, I really started evaluating our "need" for cable TV. In our apartment, cable is included, so we have not been paying seperately for it for 1-1/2 years. When we lived in the Seattle area, we used to have a semi-expensive cable package, because that was the only way for DH to add channels from his native country. Since his country's channels are not available where we live now, he started looking for other ways to watch TV, and now subscribes to a service where he watches TV from his homeland over the internet.
Other than a bit of CNN & CNBC (with a smattering of Animal Planet), the only TV I watch is major networks. So I started thinking that cable was not really necessary. I did some research, and the more I learned the more I liked the idea of living without cable.
In addition to loving the idea of not having to pay a monthly cable bill on top of the $25 we're paying for DH's internet viewing, I really like the idea of better reception. I learned that picture quality is better if you DON'T have cable, and this will especially be true once the switch is made to digital TV (June 12).
DH has been patiently waiting to buy a big screen flat panel TV. I asked him to wait until we had our new house and prices have come down. Once we're in our place, I'll give him the green light to go ahead and buy his big toy. I'll have him get an integrated HDTV one; that means it will already have an HDTV tuner built in, so we won't have to buy a seperate tuner. All we need is an antenna.
I ordered this antenna today: http://www.crutchfield.com/p_209TV55/Terk-TV55.html?o=v&sear...
With shipping, it came to $68.
DH will be installing it in our attic. According to on-line reviews I read, it is fairly easy to install. (It's an indoor/outdoor antenna. I knew an outdoor antenna would not go over well with the neighbors.) I don't know if we will have to buy any hardware for mounting, or if we have all of the tools we need, but even if we do have to run to Home Depot and buy something small, I figure we'll come in at $75 or less total. With cable at $49+tax, we will have recouped the antenna cost in 1-1/2 months or less!
If anyone else is interested in making the switch to OTA TV (and with the digital conversion coming up, can you think of a better time?), these were the sites I found most helpful in researching:
Once we're settled in to our new place, I'll let you know how we like our "new" (actually retro) way of watching TV.
We've ordered the appliances for our new house. We looked for appliances that were highly-rated by Consumer Reports, that were very energy-efficient, that fit nicely in their designated spaces, and that had features we liked. We chose "mid-range" items ... neither super expensive nor super cheap. Then we looked for the best deals we could find.
Got our washer & dryer (Fisher & Paykel) from the "Dent & Scratch" section of a discount appliance warehouse. They are new, but have some cosmetic damage ... Who cares?
Got our fridge (Kenmore Elite) from Sears last night ... they had one of their quarterly "VIP Evenings" where all Kenmore & Kenmore Elite appliances are 20% off and then 10% additional off of that ... so, 28% off.
This means we've purchased 3 BIG items in the last week. I certainly hope the ripple effects of our personal economic stimulus spending spree will reach you wherever you are.
As I know most of you are, we're pretty studious shoppers when it comes to major purchases; we put a lot of time & energy in to it. So if feels good to be done. We now have all of the "necessary" items for the house. We haven't purchased any furniture yet, but we've yet to find any screaming deals, and we can get by with what we have for the time being.
Sorry I've not been around. I've been getting lots of overtime at work (for which I am very grateful), still have my volunteer work to keep up on, and have the upcoming move.
One of these days I will update my badly outdated sidebar! Cheers.
House passed with flying colors! Just a few minor things to address ... no deal breakers.
Moving van is booked.
Got issues of Consumer Reports from the library that pertain to Washers & Fridges.
I must unearth my "moving bible" (29 Days to a Smooth Move)
Family members from around the globe have started discussing dates to come check out the new pad! Thank goodness for the hot summers here ... I think most will want to hold off until fall or winter. That will give us time to hunt & gather a few home furnishings. (Will start prowling Craigslist once some higher priority tasks are taken care of.)
If I NEVER move again it will fine with me!
Based on a rough estimate of what settlement costs will be, our new house will wind up costing us 56% of what we netted on the sale of our former house (after paying agent commissions, sales tax, escrow, etc.)
The 2 houses are amazingly comparable in terms of size, quality, neighborhood (once you get past the whole Pacific Northwest vs. Texas business ... lol), etc.
As our friend Tripods68 would say: "It's a beautiful thing"
Guess who just bought a house, and will be closing end of May?
It's in Austin.
It's been a long road getting this far!
The bank owned house that both DH & I really liked has sold ... to another couple. While we were pondering how much to offer (and deciding if we really did want to make an offer), we found out that another couple was planning to put in an offer, and that they brought the same things to the table that we do (cash buyers, able to close quickly). We decided to back off because we refuse to get involved in anything that hints of a bidding war. We're waiting to find out what the house sold for ... that knowledge will be useful when we do finally make an offer, especially if it is in the same neighborhood. And even if we don't end up buying in the same neighborhood, we will at least learn how much "wiggle room" there is in that one particular bank's list prices. We were pleasantly surprised at how quickly the process moved from first offer to mutual acceptance ... sounds like banks at least that one particular bank has sped up it's processing of offers.
As DH said, we keep finding better and better houses at better and better deals, so ... onward!
okay ... Lots going on:
- House: We are getting extremely close to making an offer on a house. We have 2 in our cross hairs. The one we are most interested in is a bank-owned foreclosure. Might happen this weekend. DH is due to leave on a long business trip, so all the paperwork and details and negotiating will be left to me. Nothing new there.
- New Little Side Business: As of this evening it's officially up but not yet running. Had to spend a little moolah today to get the ball rolling. DH is freaking out ... I must work hard to make sure I can at the very least recoup what I spent. (Don't worry. It's not enough to hurt us even if I fall flat on my face, but you wouldn't know that from the way DH is acting.)
- Stock Trade: We made our first trade. Bought an individual stock that we sold for an itsy-bitsy-teeny-weeny profit a few days later. Trust me, it was just beginner's luck! Interesting experience. DH got all worked up over the whole business. Been watching a couple stocks since then, but I'm thinking more seriously about becoming a buy & hold stock investor. We're really not "day trader" types and besides I think it would give DH high blood pressure.
- Volunteer Work: It's almost a full-time job right now. I have realized that my unpaid, volunteer work (due to level of responsibility and job title) would look better on my resume than my paid job. Right now is an important turning point for the organization I volunteer with, so everyone is working overtime and the number one gal is doing nothing but eat and sleep and work.
It would be nice if I could have just one or two of these developments going on right now, and save the others for later, but this is life and I am coping as best I can.
"Never fall in love with a house" --- I've said it myself, and I firmly believe it, but it definitely is easier said than done sometimes!
On Sunday we visited a couple open houses. One of the houses ... *sigh* ...
Seems to be very solidly constructed.
Wonderful floor plan.
Great lot size w/ pretty territorial view.
DH & I both like it a lot.
It's a bit older (about 25 years), which is both a positive and negative.
- At that age, you can really get a sense of how well built it is, because it is holding up extremely well. In fact, my DH has a very strong preference for new houses, and for him to like an "older" house it has to be very well-maintained and have a sense of solidness.
- Also, my preferred mix of furniture (2nd hand Craigslist & garage sale finds), some antiques, and some new will not look at all out of place. (Some houses are so shiny and new that you just know garage sale furniture will look odd.)
- Also a positive in my eyes is that fact that it is a tad bit out of date, which turns some buyers off and therefore keeps the price at a more reasonable level. A specific example is that it has laminate kitchen counters, and I know there are plenty of buyers out there who won't consider a house with anything less than granite. Me? I couldn't care less about things like that because they are merely cosmetic.
Negative = It is not going to be as energy-efficient as a newer house.
The other negative on the house (nothing to do with its age) is that it is a bit larger than our ideal house size.
I put a call in to the listing agent first thing this morning to get some additional information, but she has not called back, so I'm starting to wonder if the house sold. The open house was swamped, like nothing I have ever seen, and certainly not in this down market.
I must stay cool and remember this is a business transaction .....
I must stay cool and remember this is a business transaction .....
I must stay cool and remember this is a business transaction .....
We've had a couple of days of marathon house-hunting. Came pretty close to making an offer on one house, but didn't. Went so far as to bring blank contract papers home with us. Of the *gazillion* (only a slight exaggeration) houses we have looked at, it is the one we have liked the most ... and we both like it equally. Very pretty house, nice size, perfect number of rooms. It is also a pretty good deal. Problem is, we're only lukewarm on the area (DH kind of likes it, I kind of don't). That's why we decided to hold off.
We had put our Austin househunting on hold when we were leaning towards San Diego (which is still a possibility BTW), and so when we started looking around here again after many months off we were pleasantly surprised to see that the builders have started taking serious price cuts. The "Oh ... the Austin market isn't affected by the national housing downturn and won't be" arrogance that we had run in to previously is GONE. Another thing that we are noticing is that some builders are starting to build NICE, smaller houses, which is a change here in the "Everything is bigger in" state and one that we welcome.
The other housing market tidbit is anecdotal evidence that the housing market bailout may be working in some instances. Months ago, we looked at a short sale home. At that time, the owners had moved out. We contacted the listing agent and found out that after receiving several lowball offers, the bank decided to work with the owners and they have moved back in to the house.
I'm tired. For me personally, househunting gets exhausting because it is so intense. Do you guys feel the same way? The last 2 nights we were so tired we did not want to cook and ended up going out to dinner. Thank goodness for the Olive Garden gift card we got for Christmas and the BOGO coupon to IHOP ... And to Ms. Koppur who gave me the idea of IHOP for dinner! (We learned that IHOP for dinner is great because there is hardly anyone there.)
1. Today's 10-yr TIPS Auction (first of the new year, and one of only a couple for 2009): We decided not to participate. I sort of wanted to, DH did not want to, and I was not sure enough that it was a good idea to try to persuade DH. (I am starting to think that if DH was single, all his money would just be sitting in the bank. I'm the one who brings up things like TIPS and mutual funds, and sometimes I have to push to get any sort of investing done.) Since my crystal ball has not yet been delivered, I of course have no way of knowing what will happen in the next ten years. Best guess? A period of deflation (due to constriction in consumer spending) followed by soaring inflation caused by the pent-up pressure of the presses at the Bureau of Engraving and Printing running overtime during a deflationary period? Auction results were published at www.treasurydirect.gov and the yield was 2.245%. I suppose it would have been fine if we had participated in the auction, but it's not the end of the world that we did not. (If, 7 years from now, we are in a prolonged period of double-digit inflation, please remind me what an idiot I was.)
2. New Bank Account for Bonus: We decided to open up a new checking account just to get a $100 bonus (we had received a promotional coupon in the mail). We have to keep the account open for 6 months, and there is no minimum balance requirement. I do wish that banks would just offer better interest rates rather than offering these bonuses, because it is a bit of a hassle to open and close accounts ... But I suppose that is why they do it the way they do ... There are lots of folks out there who can't be bothered to open & close accounts, but for $100, I sure can!
3. We Decided to Buy a Specific House (it didn't pan out, so don't get too excited): While at a party on Saturday, DH received a semi-cryptic message from a builder's sales rep saying "I sure hope you're still in the market for a house. Call me." DH got up early Sunday morning and checked the builder's web site, and saw that on one house in particular they had taken a BIG-TIME price drop. He came in and woke me up all excited like a kid on Christmas morning. I checked it out and got very excited myself. I said "Let's buy it!" and DH agreed 100%. It was truly a screaming deal. We were ready to go out to the house and sign a contract on the spot, for the asking price. (It is in one of our favorite areas of Austin, we know and like the builder, and DH had visited that particular house and had liked it very much and explained it to me in a way that I knew I would like it too.) We had to wait several hours until the sales office opened for the day, but I got my checkbook out and put it in my purse so we could head out there and write them a check. While waiting, I was doing chores around the house and DH was on the computer Zillowing, etc. Before too long, it started dawning on both of us that something was not right, that it was just too good to be true. Gradually we came to the realization that there had to be a mistake, perhaps a mis-typing when the new price was inputted. It felt like the air slowly going out of a balloon. When the sales office opened for the day, I called them to check on the price, and as we expected the price posted on the web site was wrong. In fact, the actual asking price was more than double! Oops!
Poor DH looked so let down, but I wanted to end the whole experience on a positive note for him so I high-fived him and told him that he has a great eye for a bargain (he does).
What I learned from the experience is that we are 100% ready & willing to buy a house when the right deal comes along, and that we are capable of making a VERY quick decision if need be.
Our 4th financial decision of the year will probably be made very soon, and it will involve our apartment lease. We had wanted to move to a larger apartment back in December, but the management of our complex kept dragging their feet. Our lease is coming up for renewal very soon, and it's time for us to make a decision about what we want to do. We have new rent rates on our current unit, and information on a possible larger unit. Today I went out and checked out several other complexes for comparison purposes. We are now leaning towards going to a month-to-month lease. That will give us more flexibility. We're looking at Sept or Oct as possibly a good time to buy, but if we find a great deal (like the one we found over the weekend, but "for real") sooner than that, it will be nice to not have to break a lease. Never in my wildest dreams would I have imagined that I would be a "month-to-month lease" type of person, and certainly not at age 40-something. To me, month-to-month leases are for people who don't know where they will be a month (much less a year) from now. And guess what? Right now, that's me.
Since returning from our house hunting trip to San Diego, DH & I have been doing a bit of house hunting ... in Austin! The Austin real estate market had been holding up pretty well, but some builders seem to have "seen the light" and have taken some pretty significant price drops.
So, Austin seems to be "back in play." So much to think about ... Austin? San Diego? When to acutally buy? And what to do about the apartment lease that is coming up very very soon?
What are San Diego's advantages? Paradise on Earth: Mild climate, and drop-dead gorgeous scenery. DH can be more comfortable & happy there. Housing prices have already dropped quite a bit.
What are Austin's advantages?
Financially, very comfortable. Low cost of living (emphasis on low taxes and low cost of housing). I have work here. The housing market is showing signs that it has weakened and we may finally be able to "drive a bargain."
It almost seems like a "head vs. heart" decision, with Austin being the head and San Diego being the heart. I've been toying with ideas of how we could get both, such as staying here in Austin but planning on vacationing 2-3 weeks each year in S.D. (We've never had a "regular vacation spot." We've always enjoyed visiting new places. But maybe it's time to change that ... at least for a few years, until we get the itch to try some new places again.) I'm also looking in to a couple things that might make DH more comfortable & happier here.
So much to think about.....
DH got up in the middle of the night the other night and turned the heat on for a couple hours. I did not complain. We had a couple days of unusually cold weather (we even got a bit of snow!), and I've been sick with a cold for the past several days, spending most of my days in bed under many blankets while wearing long underwear, turtlenecks, etc.
So, I'm out of the contest! I thought we'd last until January (we're in Texas after all), but with the unusual cold snap and me not feeling well, it just wasn't worth trying to tough it out.
I've been meaning to write more about our househunting trip to San Diego, but I feel too foggy (not because of the house hunt, but because of my cold) ... I'll just say summarize by saying that we have decided to just keep waiting to buy.
DH & I were house hunting in San Diego over the weekend. Among the homes we visited, 2 were vacant short sale homes, and 1 we were pretty sure had been foreclosed on. When you visit a home for sale in the traditional way, you see the version of the sellers lives that they want to present to the world, and it's probably not very authentic. (Hey - when my house was for sale and there were open houses, it was spotless, cleverly decorated, every light was on, relaxing mood music was playing, there were homemade oatmeal & raisin cookies on the counter, and there was not a dog or dog dish in sight. So I know all about not authentic.) Not so with the short sales and foreclosures. No pretense there. You see the warts.
It was interesting to see what was left behind ... in addition to the dirt and grime.
One house in particular was quite sad. It was mostly cleared out, but a few very old (useless) things had been left behind. There were also some women's clothing left in the spare bedroom. It was definitely not a complete woman's wardrobe, just some odds and ends ... including a yellowed wedding dress ... I'd guess vintage late-50's or early-60's. Someone had held on to it for a long time and then just walked away from it. Under a tree in the backyard there was also a hand made garden tile (round stepping stone) with a mosaic heart ... Not the sort of thing that would have been left behind if that tile still meant something to the person who made or received it.
If only those walls could talk, I know there is a story there and I can't imagine that the ending is very happy.
We're now thinking that we will hold off a bit longer on buying a house ... probably at least 10 months. We're going to go ahead with our trip to San Diego next month to look at neighborhoods and the market in general, but have decided that unless we find something that we like and we think is priced significantly below market, we will not buy right now. We could be wrong, but we think if we hold off a bit prices will come down even more. We considered cancelling the trip, but decided to go ahead since it is not going to be too expensive and it will help us to narrow our search down to a few neighborhoods (right now we are a bit all over the map).
In the last week 3 houses on my watch list changed to status "sold." There are now 90 homes on my list, so that's 3% sold in a week. Sales prices were between 95 and 100% of list, and days on market were 9 - 41 days. That's the 2nd strong sales week in a row.
1. On "Sensible Spending":
Went grocery shopping today. (For those of you following the HEB Banana Price Index, it is holding steady at 49-cents per lb.)
Midway through my trip I realized how much more comfortable my past couple grocery shopping trips have been. I had my list and coupons and pen, and I kept a running tally on my list of how many dollars worth of merchandise I had in my cart. Sometimes I paused to study the product and prices before deciding which item to buy. At one point I whipped out my little calculator before deciding on making a purchase.
What was comfortable about it? Not once did I get a funny look! I used to get funny looks from other shoppers quite often. Today no one looked at me sideways, and I noticed that I had a lot of compadres ... lots of people clutching lists & coupons. A nice older gentleman & I had a brief exchange over which package of frozen vegetables was a better deal with the in-store coupon. I saw something I rarely see ... people stopping and really looking and thinking before pulling something off the shelves, not just grabbing randomly. I saw one woman looking at the prices of soda with a VERY pained look on her face; I mean, I could almost see the internal struggle she was going through written all over her reddening, screwed-up face ... poor dear. I fought the urge to hug her and whisper "tap water ... it's better for you too" into her ear.
2. On "House Hunting":
We have about 80 houses on our watch list. Last weekend a very interesting thing happened ... On Monday, the status of 4 of them changed from "pending" to "sold." I found out the sales prices, and 2 sold for 97% of list, 1 for 99%, and 1 for 100%. Now, this does not necessarily tell the whole story ... for example, if the seller paid the buyer's closing costs, or threw in some appliances or a car or a vacation or whatever, then the sales price as percentage of list can appear inflated. And, please keep in mind that the houses that are likely to make it to our watch list are those that we consider to already be "bargain priced," so it's possible to percentage on our list that are selling is a bit higher than the percentage for the San Diego market in general. But still, it was interesting to see so many go to sold over one weekend (I had not been keeping track before this, but if my memory's correct there was maybe 1 going to sold every 2-3 weeks) and selling for so close to list.
Whether last weekend was a funny little blip or part of a trend remains to be seen. Very curious to see what will happen THIS weekend.
3. On "Investing & Risk Tolerance":
I've been thinking about this a lot the past few days ... You know those risk tolerance calculators that you can find on all of the mutual fund web sites (and other places)? Did they not work? Do they need to be re-calibrated? Or did people either just not bother to do them or not answer them honestly or without much self-awareness? Why do so many seem to be invested in things they very clearly did not have the risk tolerance for? The tools were right there for the taking, free of charge ... Did not enough individual investors not use them? Or did they not work as they should have? It's so baffling; am I missing something?
4. In Spite of the Craziness in the Stock Market, One Truth Remains: Numbers Don't Lie!
Yesterday my husband started talking about how he was thinking of moving his entire SEP-IRA to bonds - GASP! I knew I had to stay calm, so I just asked him why, and he started moaning about how much money he has "lost" (his word, not mine). I told him "you haven't lost money." And he said "how do you know?" I pulled out the good old-fashioned yellow sheet of lined paper from the front of his SEP-IRA file where I keep track of his annual contributions and I showed him how much he has contributed out-of-pocket and how much his balance is now, and whaddayaknow ... He hasn't lost money ... He has made money. Not a ton, but a bit. Up about 3-1/2% per year since he started contributing to his SEP (formerly a Keogh), tax year 2001, this in spite of the recent downturn. I think I've managed to talk him down from the ledge ... for now. I wonder how many other people have actually done better long-term than they think they have? They should look at the numbers ... they don't lie ... and they aren't emotional either.
Where have you had most luck buying the best home furnishings? "Best" means the right combination of price and quality ... whatever that may mean to you.
I am starting a list of places to shop for home furnishings (mainly furniture) after our move, and this is what I have so far. What I'm really looking for is alternatives to the "regular" retail stores, tho' I will start there for pricing benchmarks. I am totally receptive to the idea of buying 2nd hand (with some exceptions, such as mattresses).
www.shopgoodwill.com (Goodwill auctions)
What am I missing?
No secret around these parts that I am a conservative investor, so this may surprise some, but right I am feeling some urges to put more money in to the stock market. (Bet you never thought you'd hear me say that, right?)
My great-grandfather did pretty well putting money in to the stock market following the crash of '29. There's a side of me that asks if he had the guts to do it, why don't I? You know the little voice, the one that says:
Oooh ... Dow's below 10,000 ... prices are down so much, so stocks must be a real bargain, right? Maybe ... maybe not. Bottom line is: I don't know. I am not a stock-picking genius. I am not my great-grandfather. I am comfortable with my current investments, and I am going to stick with them. We will continue putting money in to our IRAs (as much as we are allowed), and those new monies will continue going in to mutual funds that are a mix of stocks & bonds.
In keeping with my conservative nature and spurred by the current market drop, I have set a date when I will start gradually pulling money out of the stock market. But that doesn't involve making any changes right now.
We will continue house-bargain-hunting and nurturing my husband's business. We will continue living below our means and saving. Those are areas where we feel comfortable and confident. That's what I know.
But I am NOT going to buy individual stocks or invest in stock funds outside of our tax-deferred savings ... and I can live quite happily with the results, even if I miss out on the next bull run. I will not regret that I did not buy stock XYZ and double my money in 6 months. And just what is stock XYZ, the one that will double in 6 months??? I have no clue.
I may not know a lot, but I do know enough to know what I don't know.
No, the fact that 2 of my banks (WaMu & Wachovia) went buh-bye within a period of 5 days did not cause me to take a long walk off of a short pier. I'm still around. It's just that DH's business and my volunteer activities have really kept me hopping, and I did not want to crank out a hurried blog entry that would end up sounding completely incoherent.
First, on the bank thing. I know you're all sick of hearing about it, but as far as I know I'm the only one around here who has accounts at both of the "W" banks, so you might be curious to know how I feel about the whole business. It's fine. Really. Since WaMu was a bona fide failure, it was more disconcerting. But we had already done what we could (short of panicking and pulling all of our money out) to feel prepared for a failure. And with Wachovia ... well, the irrational side of my brain thought that it would have been nice if I could have had a couple weeks between bank blow-outs to get myself prepared emotionally for it! But then again, maybe it was nice to just get it all over with at once. I'm still keeping my eye on what will happen with my yields. With WaMu, I have an MMA. Don't have very high hopes there. With Wachovia, most of my money is in CDs, so I am hoping that my rates will be in effect until the CDs mature.
I went in to my WaMu branch yesterday (had volunteer-related business that had to be taken care of), and the mood there was quite upbeat ... A big change from Friday.
On a really positive note, I did manage to earn some respect points with my DH for the nagging I did to get him to switch his business account from one that was not FDIC insured to one that is. (Side note: As small business owners, we are fully in support of raising the FDIC insurance limit, and think it is long overdue. This is something they have been talking about for years. For many small businesses, ours included, it is darn near impossible to operate efficiently and keep your balances under $100K at all times.)
Thrift-o-rama asked how we were coping with all of the turmoil in the financial markets, and someone else asked what we are going to change. This is what I've done and what I am going to do (and whether I'm right or wrong, I really don't know, but I'm doing what feels right for us.)
- Over the weekend, spurred by the WaMu failure, I printed out two well-known poems that I like and they are sitting on my table so I can glance at them any time I need to. They help me stay focused. One is "If" by Rudyard Kipling, and the other is "Desiderata" by Max Ehrmann. BTW, I know many people like the line in "If" about keeping your head when all about you are losing theirs, and I like that too, but actually my favorite part is "If you can fill the unforgiving minute with sixty seconds' worth of distance run, yours is the Earth and everything that's in it."
- On Monday I turned on the news as I was getting ready to make lunch. Saw the Dow plummeting. On top of 2 banks going under, it did feel overwhelming, and I'll admit I felt anxiety coursing through my body. I found myself thinking "OMG I hope the Dow doesn't drop below 10,000 ... no, it's not a logical response and 10,000 really is no different from 9,999 ... it's purely a psychological threshold ... but it goes to show that no matter how rational we try to be, sometimes irrational thoughts take over. I realized I still had work that needed to be done and I needed to focus. So ... and I admit this may sound silly ... I decided that instead of just throwing together a sandwich, I was going to make myself a nourishing lunch of brain food. I fixed a salmon patty and steamed spinach. That's right ... the Dow plummets and scfr steams spinach!
- Monday evening, after I had finished the work I needed to get done for DH, I popped a Netflix DVD in the player and watched one episode of the old BBC series "As Time Goes By." I love that series ... It never fails to make me laugh out loud. By that point, I REALLY needed a laugh, and it felt good.
- As far as our investments go, we're not changing a thing. Our portfolio was designed so that we could emotionally handle a serious market downturn. I did write a date on my calendar (in 2015) when I will revisit our asset allocation, and come up with a plan to GRADUALLY, year-by-year start moving out of stocks. At a certain age, I'd like to be 100% out of the stock market. (My thinking at this time is that age 65 would be good ... I do realize this is not necessarily a wise plan for everyone.) I feel for the senior citizens whose portfolios are taking a serious beating. I wonder how many of them still have the same asset allocation that they had when they were 40 or 45 or 50 ... and if it made sense for them back then and they just never changed it?
- As far as cutting back, we decided not to renew our just-expired subscription to the Austin Sunday paper (I get the WSJ Mon-Sat). Because we are moving away, we may have decided to let it go anyway, but the country's financial situation made the decion to save $2.44 a week that much easier. I clip a couple coupons in an average week, but do not save enough from them to justify the cost of the paper. Also, DH & I have been discussing our grocery budget and how we might trim it a bit. I am going to be presenting my plan to him when he returns from his business trip next week.
- I have some scrap gold (broken necklace, etc.) somewhere. I'm going to go ahead and sell it ... If I can find it.
- I'm going to vote. Nothing new here, but I do believe it's one of the most proactive things all of us can do to impact the course our country takes.
- We're moving whole-heartedly ahead with our plans to buy a house.
- And now for the more unconventional, and perhaps controversial, idea: When we open our next bank account (if we decide to bail on Chase or Citi for example), it will likely be with a bank that is owned by a non-USA company. For example, since we are moving to Cali, having an account with Union Bank of California makes sense. They are a member of the Mitsubishi UFJ Financial Group. If diversifying your stock portfolio internationally makes sense, then why not diversify your bank accounts as well? Y'all can call me crazy if you like, but as I said, we're doing what feels right to us.
After all of the effort to relocate to a lower cost part of the country (from Seattle to Austin), why are we now planning to pack up and move yet again to San Diego?
Short Answer: Becaue we can, so why not? If you have to ask, you probably haven't ever been to San Diego! It's gorgeous. We both love it. And for the first time in our married life, it is "comfortably affordable" for us.
Longer Answer: When we got married, DH was not instantly enamoured with Seattle (to put it mildly). We married in the spring, and Seattle unfortunately had a very wet summer that year. It wasn't long before he started talking about moving to California. Keeping an open mind, we discussed that. He was okay with San Diego and LA; I was okay with San Diego and the Bay area. San Diego was the one area we both liked...in fact, it was the first choice for both of us. But at that time, it was just too expensive for us (as were SFO and LA, frankly). So, we stayed in Seattle, and DH learned to like it. But he never cared for the rain or occasional snow. After we sold our house and started thinking about relocating to another area, a warm climate was important, as was a lower cost of living. We spent months researching and thinking about it, and finally settled on Austin. (At that time, we did not really think about San Diego because real estate prices there were still so high.) I like it here, but DH has never really felt like he fits in. Knowing DH wasn't really loving it here, while we were house-hunting, we continued to keep an eye on the markets in other parts of the country (especially on the West Coast). As everyone knows, the market in Southern California has really plunged. One day I just looked at DH and said something like "You know, I think we could move to San Diego now" ... and that was it. Within a day we had decided to go, and it felt absolutely right. No need to do months of research this time. It's just that it is now feasible to live someplace we both have always wanted to live, so why not?
Our expenses are going to go up. They will be much more than they are here in Austin, and because of the state income tax will even be a bit higher than they were in Seattle.
DH thinks being back on the West Coast will help his business a bit, and it probably will, but we can't plan on that. So our income will basically be the same as it is now and bit less than it was in Seattle (because I don't have my business anymore).
But we will both be happy ... and DH much more so. That is worth a lot.
The temperate climate will mean DH can get out and golf much more often, and the dog and I can take longer walks (and on the beach to boot).
I have a friend from college who lives in San Diego, DH has a couple friends who live in the LA area, and I have family in LA. (LA's not San Diego of course ... but it's a heck of a lot closer than Texas.)
All of our family wants to come visit us there! What's not to love about being a tourist in San Diego?
So, in spite of the higher cost of living, Sand Diego just has so much going for it that it makes perfect sense for us.
The move is going to be so easy, since we sold off so much before moving to Austin, and have held off on buying any new furniture until we had a house. I think this will be my easiest move since I was a college kid heading off to the dorm.
As easy as it will be, that doesn't mean I look forward to it. I look forward to the destination, but moving is indeed a pain. I am keeping my fingers crossed that this really will be our last move until we make that final move (condo, retirement home, nursing home, or hereafter).
House hunting has been very interesting. Bank owned foreclosed properties, short sales, trustee sales ... We're seeing it all. I've looked at several houses (on-line) where the home was foreclosed mid-renovation ... flooring torn up, kitchen counters off, interior doors lined up in the garage, etc. For anyone willing to put in some time/effort/money, there are some real bargains out there!!! We will spend less than what we sold our house in Seattle for ... it will mean a smaller and probably older house, but we will still come out ahead as far as we're concerned.
Thank goodness for the internet. It makes house-hunting so much easier. We are working with an agent this time (since we are on a strict time table for making a purchase and we are commiteed to buying) ... He sends me new & updated listings everyday, and I look them over. If they look interesting, I can Zillow them, and look on Mapquest to see where the nearest grocery stores are.
We have already purchased our tickets, reserved our rental car, and book our hotel room for our house-hunting trip out to San Diego (in early December). We also have our game plan. The only things I still have to do, in addition to continuing to house hunt, is to buy a digital camera and make a boarding reservation for the dog (I have narrowed my choices on both down to just a few, but am waiting to pull the trigger).
Ideally, we'll move late-Feb or early-March. But we have been warned that if we buy a short sale, the negotiation stage can take months. So, we are "hanging loose" about the move date. If need be, we can extend our lease here on a month-to-month basis.
And do we regret having moved here to Austin just to have to pack up and move again? Absolutely not. When we made the original decision to move away from Seattle, San Diego just wasn't a good option financially. Austin was, and it was the right choice at the time. It has been really, really, really nice having such low expenses, even if it was just for a brief period of time. And it's a great town.
P.S. - Did you notice my updated Cool Quote in my "About Me" column? I guess a bit of Texas has rubbed off on me.
Off to Mom's: I'm heading off to spend a couple weeks at my mom's ... all of my siblings will be there at least briefly (the 3 sisters all live in different parts of the country). Of course my darling brother (who lives with my mom) will be there the whole time, and I am looking forward to spending time with him as well as with Mom. I will be doing my utmost to NOT talk about personal finance while I am there, since my mom & I definitely do not see eye to eye. (I have refrained from blogging about mom's finances because it would probably turn in to a long and ugly bitch-fest.) What I do plan on doing is filling in some of the information on her "Letter of Instructions." I have printed out a blank copy and packed it in my suitcase. I agreed to be the executor of her estate when she passes, and I asked her to fill out the LofI for me. She said she would but it has been several years and she has yet to do it. I feel woefully unprepared to deal with her estate, and for the sake of my brother (who is developmentally disabled) and for the sake of my own sanity when that time comes, I feel I must get some information from her (including the mere basics such as the name of the attorney who drew up her will). I am telling myself to tread lightly ... I will be saying the Serenity Prayer frequently, I'm sure.
San Diego Plans: DH & I have worked out a temporary plan. He will head off to San Diego shortly after Thanksgiving and spend about 4-5 days househunting. He will narrow the choices down to 10 or so, and I will go out for a day or two to see those 10 houses together with him. If all goes according to plan, we will put an offer in on one of those houses (tho we will also decide on 2nd and 3rd choices as backups in case the negotiations on the 1st choice falls through). We have heard from several agents, both here and in Cali, that the buying process on a short sale is quite lengthy ... as long as 16 weeks. We don't know that we will be buying a short sale house, but given the market conditions in that area right now, odds are pretty high that we will, so we are allowing plenty of time for a lengthy negotiation and closing in the spring. In the meantime, we are doing lots of "window shopping" on the internet.
Austin Sightseeing: I have checked "Cavern Tour" off of my list of things to do before I leave Austin. It was very cool. Will try to write about it later, but now I must go finish packing.
Today we attended a Home Tour in a nearby community where a builder was giving away $25 gas cards. In addition to the gas card, we got free drinks and snacks.
Awhile ago, we visited the model homes of a builder who was giving away Target gift cards.
I think we will see more and more of these giveaways if the home market remains soft.
Here in Austin, the housing market is still relatively strong compared to the rest of the country. I can only imagine the freebies that can be found in more depressed housing markets.
Might be worth skimming the real estate section of the Sunday paper, even if you aren't in the market for a new house.
1. Short Sale House: DH & I went to look at it yesterday. It is a real beauty, and it is being offered at a really good price. I had looked at it once, and was afraid DH would fall totally in love with it and want it. I say "afraid" because while it is a lovely home, it looks like the type of home where we would spend quite a bit of time on upkeep of the house and the yard. Fortunately, DH agreed that the house would require quite a bit of time on an on-going basis. (Actually, he made that comment about the yard only, but I can tell the house would be the same, and guess whose shoulders that work would fall on?) The house is pre-foreclosure and has been unoccupied for 6 months. It has not been trashed, but it has been a bit neglected. When we got home, DH walked in to our apartment, looked around, and said: "I like this apartment. It's so CLEAN!" I replied, "Yes, it is" but inside I was laughing and thinking "That's because the magic cleaning fairies show up on a regular basis" I was also thinking "Give me 3 days alone with that house and it will sparkle" but I didn't say that because frankly I'm still hoping for a smaller, more modest house and I did not want to put any ideas in DH's head.
2. 2nd Car: Apparently I was not the only one researching cars the last month. In addition to the SmartCar that I want to test drive, DH wants to check out the new Volkswagen Jetta Diesel. Looks like a reasonable choice to me. Now I just need to find out if it's currently available in our area.
3. Short-Term CDs: BofA is offering a 7-month CD @4.11% (available on-line only). Not too shabby. We decided to go with that for some of DH's post-busy-season money. Higher rates are available elsewhere, but either the terms are longer or the bank is shakier.
4. VMSXX: We discussed, and DH is considering it. He's a bit anxious about putting non-tax-deferred dollars in a non-FDIC insured spot. Why that is any worse than putting tax-deferred money in a non-FDIC insured spot is beyond me. He keeps asking me: "How safe is Vanguard, really?" I'm all for VMSXX, but DH needs a bit more time to process the idea ... He has a couple friends who are both financially savvy and conservative. No doubt he will be consulting with them. Hopefully we won't end up with a mattress investment.
1. Spa Treatment: "The procedure" was today. It turned out very well, tho my face now feels a bit itchy and I can see major breakout starting along my jawline. I'm glad I had this done when I can lie low for a few days. I was a bit red for a couple hours after, but fortunately that calmed down because DH called and asked me to take care of some business for him this afternoon that involved meeting someone. The good news was that I ended up spending only $41 (including tip), not the $50 I had expected. I knew the price of the procedure, but for some reason had mentally added $4 to the price. Also, either tax was included in the price or Texas does not charge sales tax on services (this is the first time I've had a service performed in Texas so I don't know). I had researched spas on Citysearch, looking for customer-recommended spas nearby, narrowed it down to 3 spas, and then checked their rates on-line. The one I chose had a Citysearch coupon for first-time customers. Not only did I get $10 off but I also got a "free" body lotion that normally retails for $28. Not the sort of thing I'd normally buy, but I was happy to take the freebie. Thanks for all of your positive comments on my previous entry. I now feel perfectly fine about my little "secret-self-esteem-boosting-expenditure."
2. In-Laws: A while back I blogged about getting a retirement gift for my in-laws.
FIL was supposed to have loose ends wrapped up and be officially retired by June 20th. Guess what? He's still working! Since MIL has already moved to their new home, he had moved in with SIL. But apparently he decided he had overstayed his welcome, so he is sleeping in his office. Good grief! I really don't know if it is because there is a holdup on the portion of the business he is selling, or if he just is emotionally unable to stop working. Take note everyone, especially you self-employed folks: As retirement approaches, create a set-in-stone exit strategy for yourselves. I wonder if it would help if we told him that we were going to give him a nice gift, but that he won't be getting it until after he has actually retired?
3. House Hunting: I went and checked out a home that is in pre-foreclosure ... the sellers are trying to do a short sale. It's a really lovely home but I think it's too big and too much money, but DH is REALLY interested in it so we'll be going back to see it after he returns from his trip. Sad situation for the sellers tho ... It's a really lovely home yet they only lived there for about 1-1/2 years. It never ceases to amaze me how so many people managed to get themselves so over-extended.
Before I leave for work in the morning, I make my lunch and fill up a travel mug full of coffee.
I had a couple days off and I guess that threw off my routine. This morning I forgot my coffee! So, I decided to use the vending machine at work for the first time ever, and shelled out 65 cents for a cup of java. Necessary expense? Certainly not. But I decided it would be better than going through the entire day without coffee.
I remember back in my early 20's I would have spent the money without even thinking about it ... I probably would have been buying a cup every day, in fact. Now it's a conscious decision, every time I choose to spend money.
Oh, and speaking of spending money (a bit more than 65 cents this time) ... DH has found what he thinks is a fantastic deal on a foreclosed house, and on paper it looks good. We are going to take a look at it this weekend. We'll see what it looks like "in person" ... it's in a neighborhood we like very much, and it just might be a real bargain, but it's a bigger house than I was hoping for.
Great Brunch Out: Today DH & I went to Olive Garden for an early lunch; we both had the all-you-can eat soup/salad/breadsticks combo ($5.95). We had a $4 coupon, so the total with tax & tip for 2 of us came to $10.34 ... Not too bad for a tasty lunch with lots of veggies (tho the lettuce was iceberg), no dishes to wash, and a date with my favorite guy! We don't eat out a lot, so it's always a much-relished treat when we do! [And in case you're wondering, we combined our brunch out with running other errands, so there was very little gas expense.]
Broccoli: Oh I'm still smiling about this... It's been so long since I found a good deal on FRESH veggies! Super Target had a sale on broccoli, the cello-pack bunches for 2 / $3. I had a coupon that I had printed out on-line for $1 off, so I got 2 big bunches of broccoli for $2. Since they charge by the bunch instead of by the lb, of course I chose the heaviest bunches!
Staying Put: We decided to renew our lease, so we'll be staying put for awhile. We do think home prices will drop a bit more, we are completely contented where we are, and it's lovely having our costs so low, so why not wait?
I am kind of burned out on househunting, and am relieved that there is no reason to do any more of that until the fall, when we can get serious about looking (and then hopefully buying) again.
New Job: Forgot to mention that I got a job. It's intermittent full-time ... not contract work, but off & on temp assignments, challenging & enjoyable; I will likely stick with just this until we buy a house.
1. Car Insurance Discount: Geico is good! After DH finished his on-line defensive course, they instantly applied a 10% discount to our auto insurance premium. I thought they would apply a credit to our next bill (for the period already paid for), but they cut us a refund check that we already received. Those guys are fast!
2. HSA: DH went in and got his teeth cleaned, and paid using our HSA. It was the first time we have used our HSA. He said it felt good knowing he was paying with tax-free money. He also said the dentist was great. The January edition of "Austin Monthly" magazine included a "Top Dentists" ranking, so I used that to select a dentist (called several rated as top general dentists in our area, and chose the one that was taking new patients and had the most professional office staff). Someone posted in the forums about dentists being crooks, but I've almost always had great dentists --- only had one bad experience and that was with a guy who was subbing for my regular dentist. I've always relied on personal recommendations when choosing a dentist, but since we are new here I thought the magazine ranking would be a good substitute for word of mouth. The only bummer was that the new dentist doesn't offer a cash discount, but I suppose if you are a "Top Dentist" you don't have to ... or maybe offering cash discounts just isn't as common here in Austin as it was in Seattle.
3. New Account Bonus: Haven't received my $75 prepaid Visa gift card from Wachovia yet (for opening a new account), and it's been 6 weeks... They said allow 4-6 weeks. Guess who I'll be calling tomorrow? Did they think I'd forget? They don't know who they're dealing with!
(Update: Oops --- It's only been 5 weeks! My bad.)
4. Interest Rates: I have a CD maturing Friday. This is a little reminder to myself to try to not get upset when looking at renewal rates and deciding what to do with the CD funds. I already know rates are down, and I can't control the rates. I can negotiate but I can't control. I'll do the best I can and try to be thankful and proud that I have money in the bank.
5. House Hunting: Our current lease will be up in a couple months, so we are at a point where we have to decide if we want to renew the lease (and if so for how long), give notice, or go month-to-month. We went back to look at one house yesterday that we liked and was a good size & price, but ruled it out because of location (nice neighborhood, but in the middle of nowhere). It was disappointing because I had pretty high hopes for that one. Oh well. There are still two houses on our "short list," but I think both are more than we ought to spend, are too big, and will require too much ongoing expense in terms of maintenance, property taxes, etc. So, I am going to step up my efforts to find something small and affordable that DH will like.
There's quite a bit of advice out there about how to avoid buying too much house.
But what I've been pondering lately is whether you can buy too LITTLE house? By little, I'm referring to house value, not size.
There are no "rule of thumb" answers to this question that I'm aware of, and as far as I know none of the mainstream PF writers have written about it. So, this is a "think outside the box" question. Any thoughts or opinions any of you can offer, no matter how off the wall, would be very much appreciated!
As I have pondered this question so far, my answer wavers between "a qualified no" and "well, maybe yes."
I say "qualified no" because there are a few situations where the answer would in my eyes obviously be yes:
- If you are living in a house that is a health or safety hazard (a rat-infested firetrap, for example) and you can clearly afford to buy a better house, then yes, I think you have too little house.
- If you are horribly miserable in your house (family of 8 crammed in to a 1-bedroom house, for example) but you could easily afford a more comfortable house, then yes, I think you have too little house.
- If you buy a house that is very poorly constructed and corners have been cut to bring the house price down, then yes, I think you are buying too little house short-term (tho' given what you will end up paying in repairs, you may be buying too much house long term).
But beyond these fairly obvious (in my eyes) and extreme examples, can you buy a house that is too low in value? As long as the house is safe, comfortable, and well-constructed, does it matter? If I ended the discussion here, it may seem that the answer is "well, no, duh, you can't buy too little house."
But ... Then I start thinking ... Is it possible to have too LITTLE of your net worth tied up in your primary residence?
Historically, house values have kept pace with inflation. You can get better returns than that with almost any other investment, even extremely conservative ones such as TIPS or MMAs. But on the other hand, house value increase does have the advantage of being tax-exempt in many (most?) cases. So this is why I say "well, maybe yes" you can spend too little on a house. Perhaps there is a minimum percentage of net worth you should consider not going below when buying a house?
I'm relying on my memory so this may not be 100% accurate, but I read some Census Bureau data that said the average American household has about 40% of it's net worth in home equity, and the highest wealth households have a bit less than 20% of their net worth in home equity. Does this data mean anything???
And ... When will I stop grinding my teeth when I start pondering how much to spend on a house? Please don't suggest that I stop thinking about it so much. I just can't conceive of making the single-largest purchase of my life without thinking about it from every conceivable angle!
Today DH & I threw out a lowball verbal offer on a house we like. We were pretty sure we wouldn't get the house (we didn't), but we finally decided that we had nothing to lose by making the offer. To tell you the truth, I was more than a bit nervous about giving the builder's rep the offer. After giving myself a little pep talk and summoning my courage, I walked in to the sales office and presented the offer in a straightforward and respectful way, and the rep returned the favor by replying in an equally respectful way why the offer wouldn't fly. He filled me in on some recent sales prices in the area. I left the house feeling better informed about the market than I was when I went in.[In case you're wondering where my Prince Charming was all this time, he turned chicken and decided to wait in the car!]
I guess you could call this "strike one" in our house hunt, but I actually feel fine about it because it was such a good learning experience. And it was a good reminder that it never hurts to ask!
We'll just keep looking and know that eventually we'll find a house that we like where the seller is willing to sell for what we are willing to pay. [The last house we bought, it was the fourth house we made an offer on. How long will we keep looking? As long as it takes.]
"Courage and perseverance have a magical talisman, before which difficulties disappear and obstacles vanish into air." - John Quincy Adams
|<< Newer Entries||Older Entries >>|