Road Trip!

gagrice

@berri said:
Gary - movers have gotten very expensive. So need to factor that against the taxes you expect to save to see how long the payback period is (if the move is being cost savings motivated). Then again, don't know the cost of housing which may offset some of that initial moving expense through a lower house cost. I believe that town your son is in is south of Eugene, but a doable drive from Portland. Across the river is Vancouver, WA which has no state income tax.

Moving is no small amount. I looked into moving our stuff back to KY. It would shoot down $20k without taking much furniture. After spending 2 weeks in 90+ weather with about that much humidity. I would have a real tough time convincing my wife to move. I have thought about living in WA just across from Oregon. Get the best of both tax worlds. We would probably just stay put if not for paying about $17k per year in property and income tax. And having it go higher every year. If the kids get moved to Cottage Grove this Summer we will likely go up around Thanksgiving and check out the area closer.

gagrice

@slorenzen said:
That home you posted has been on the market for over a year, so I bet they're willing to deal by now..

Just looking at Oregon, and its economy, I would say they are just now feeling the effects of the housing bubble bursting. Low end homes are not selling well. And when they do it is well below the Zillow Estimate. I think I see some room for appreciation in Oregon. I look forward to going up and looking around.

berri

Low end homes seem to be a bit slow in many markets these days. I don't really know if that's a factor of unemployment or millennials weighed down by college debt? Might also be that people with the money to buy want to start higher up the chain. I'm retired now and starting to wonder if I really want to own a home much longer. When I go back and look at the interest I've paid out over the years, as well as insurance and maintenance and repairs, not to mention yard stuff and landscaping, I'm not really sure if renting one and investing the equity from my house might not be a better way to go?

fintail

Historically, the job market in metro PDX anyway has been a little weaker than Seattle - but housing is still a lot cheaper. I don't know if there is room for appreciation in western OR - get away from the cities, and the money runs out like anywhere else. Maybe just more fairly priced compared to insane areas like CA. Affluent boomers/silent generationers and public sector types won't keep things going forever. If the dopey tax incentives were dropped, I predict there'd be a huge drop off in lower end prices. Subsidies by any other name...

@gagrice said:

gagrice

@fintail said:
Historically, the job market in metro PDX anyway has been a little weaker than Seattle - but housing is still a lot cheaper. I don't know if there is room for appreciation in western OR - get away from the cities, and the money runs out like anywhere else. Maybe just more fairly priced compared to insane areas like CA. Affluent boomers/silent generationers and public sector types won't keep things going forever. If the dopey tax incentives were dropped, I predict there'd be a huge drop off in lower end prices. Subsidies by any other name...

Is the interest tax deduction a subsidy or a leveling of the playing field? If you consider taxes to be extortion then the tiny bit you save with the interest deduction is hardly worth talking about. I don't see prices dropping significantly for long. Cost of replacement is too high. Here it costs about $45,000 just for permits to build a tract sized home. Add $10,000 for water hookup, you provide the trench and pipe to the meter at the road. With a minimum $150k for a building lot, you are near a $250k before you ever stick a shovel in the ground. Figure $200 per square foot and a 2000 sq ft home will cost a minimum of $650k to have built. And it was no different in Kentucky. I found a great piece of land for $200k and they figured $200 per foot there. So to replace my 3000 sq ft home here would be over $800,000. Homes in most of the country are well under replacement cost right now. In other words a bargain.

For reference when we bought this place for $625k there was not a building lot with water available for under $400k. Now those lots are more like $200k. Cost of building has not gone down at all. It is just the land value and the hassle to put in a subdivision. The only difference I see in places like TX or KY compared to CA is the costs extorted by the counties. Of course for $200 a ft in KY you get a brick home. Here you get ticky tacky stucco home.

slorenzen

@gagrice said:
For reference when we bought this place for $625k there was not a building lot with water available for under $400k. Now those lots are more like $200k. Cost of building has not gone down at all. It is just the land value and the hassle to put in a subdivision. The only difference I see in places like TX or KY compared to CA is the costs extorted by the counties. Of course for $200 a ft in KY you get a brick home. Here you get ticky tacky stucco home.

My daughter and son in law bought a place a year ago, listed at 520K.

18 acres, 2 barns, and 4200 sq. ft. house with 4 bedrooms, 3.5 baths and a GIANT bonus room over the 3-car garage.

You could not build this place for what they paid...

gagrice

@slorenzen said:
My daughter and son in law bought a place a year ago, listed at 520K.

18 acres, 2 barns, and 4200 sq. ft. house with 4 bedrooms, 3.5 baths and a GIANT bonus room over the 3-car garage.

You could not build this place for what they paid...

That is exactly my point. In my travels and property search, homes in general are a bargain. There are over priced homes everywhere. But look how long they have been on the market. If you want to sell a home at the peak prices of 2007, you may have a long wait. Some cities have already passed the crazy peaks from before the bubble burst. Mostly bought cash by people flush with money in a boom economy, like the San Francisco area. I am personally not interested in living in ANY city bigger than 30,000.

After spending a week in the high 90s with 90% plus humidity, I don't think I could ever talk my wife into the Midwest or TX. My wife was much happier when we got into the hot dry desert of NM/AZ. That means OR/WA are probably my only chance of getting out of CA. I have fond memories of living in Portland from 1952-56. So Cottage Grove may be our destination. I could see us in a place like this with close access to fishing.

http://www.zillow.com/homedetails/32623-Glaisyer-Hill-Rd-Cottage-Grove-OR-97424/48460426_zpid/

stever

There's fishing not too far from Las Cruces.

One problem, at least in Las Cruces, but probably most everywhere, is that once you start getting above the median house price, your pool of potential buyers starts shrinking and your time to market increases. There were something like eight "million dollar" homes for sale in recent months there; one had sold and the average time on the market was well over a year.

Very similar to the time to sell in the UP come to think of it, for anything over $30,000 or so. The million dollar beach house here dropped to the low $700s when they took it off the market a year ago. :-)

Yard sale planned for this weekend. Then I get the garage completely cleaned out and will stack our remaining stuff in a space equivalent to what the van will hold. Anything else will be culled, stored in TN or mailed. Have to remember to leave space for the cat crate. :-)

We have company in July but I'm already jonsing to get back on the road. Next trip will likely be a quickie to TN to see my mom and dump some junk on my brother (he's gonna love that LOL).

slorenzen

@gagrice said:

This place is roughly 4 miles from me. Nice quiet area, about 10 minutes to town. Only internet options would be HughesNet or Excede satellite, however. I know this, as only recently did we get Charter to my house.

Now retired, I was telecom for a large company in Springfield for many years, and being in the IT dept., needed VPN access to work.

Satellite is fine if you don't need VPN, otherwise the latency won't allow consistent connection.

stever

Good reminder - I've noticed that many MLS listing now include "high speed internet" as an option. That was a nice surprise moving here - great bandwidth available.

slorenzen

@stever said:
Have to remember to leave space for the cat crate. :-)

Didn't I hear of a guy who tied his dog to the roof of the car recently?

stever

Hehe, there's an idea. I have been dropping hints about getting a standard poodle once we get resettled.

fintail

I don't know what is being leveled, don't taxes usually cover the amenities that make a place desirable? Or to make up for a lack of revenue from other tax cuts? I can't think of many low tax areas that people want to live in. But, it's a nice subsidy for the FIRE industries.

Replacement costs are higher than existing housing because an old house is like a used car, always with some kind of wear and tear, deferred maintenance, defects, different engineering standards, and simple age. Sometimes used cars are old enough to have charm and character and can be of better materials, like old houses - but there are prices paid for that. Add on the sunk costs you mention, and it will almost always be cheaper to buy an existing house. And about brick, I hope you don't like it - probably 95% of the housing stock in the PNW is simple wood siding. Low maintenance brick veneer as is common elsewhere does have an appeal when done right.

It does sound like western WA or OR might be good for you. If you don't mind actual seasons (90s in summer, snow in winter), eastern WA and OR can be nice too - more sunshine, less density.

@gagrice said:
For reference when we bought this place for $625k there was not a building lot with water available for under $400k. Now those lots are more like $200k. Cost of building has not gone down at all. It is just the land value and the hassle to put in a subdivision. The only difference I see in places like TX or KY compared to CA is the costs extorted by the counties. Of course for $200 a ft in KY you get a brick home. Here you get ticky tacky stucco home.

slorenzen

@fintail said:

" And about brick, I hope you don't like it - probably 95% of the housing stock in the PNW is simple wood siding."

Back when I traveled to Europe on a regular basis, the locals would disparage the wood construction on the west coast, until I reminded them they'd all be dead is a 5.0 earthquake in their brick homes.

Wood construction flexes really well...

stever

Brick is nice for low maintenance, but I really like stucco. Good for fire protection too.

But it's back to getting a vernacular house that's made with readily available local materials. They just look "right" for the area. Kind of like visiting Vermont and seeing tons of Subarus or all the Buicks in Florida.

gagrice

@slorenzen said:

I spent 46 years in the Telecom industry. I would feel somewhat lost without Internet. Don't care about TV. One thing I noticed in looking around, there is not much logic to where you get good Internet service. My daughter and son in law both work at home with VPN. They said the service in Indiana was far superior to what they had in San Diego. Much higher upload speed. One of the places I really like in KY is 8 miles from town and has fiber to the door. Go Figure that. My son is more rural in Indiana and he has AT&T U-Verse for phone and Internet. They did not want TV service. So many factors to consider when looking for a home to buy.

kyfdx

@slorenzen said:
Wood construction flexes really well...

You know the brick in most houses is just a wall covering, like wood siding, right? Very few houses have any sort of structural advantage from brick. My brick house is built out of wood, too... ;-)

berri

I can't think of many low tax areas that people want to live in. But, it's a nice subsidy for the FIRE industries

Tax savings can add cash flow to a person's budget. Tax deductions can be an advantage to a home buyer/owner. I think what the FIRE industries have excelled at is misleading buyers on what those advantages are really worth. If you are in the say 21% marginal tax bracket, those hefty interest dollars you are paying (particularly in the first half of mortgage repayment) you save 21 cents through tax deductions, while you are paying out 79 cents to your financer. OK, in reality you're booking a few cents into equity. Most owners average around 7 years in a house I believe, but on a 30 year mortgage you are not booking a lot of equity yet with each payment at the 7 year ownership point. The power of compounding (for the lender!).

Very few houses have any sort of structural advantage from brick

Yep, a lot of it today is veneer. Brick does look good on a house, at least until it starts aging in a tough climate or environment. Our house is brick and aluminum. The aluminum requires an occasional power wash. Overtime, the brick needs things like tuck pointing, or sometimes a few need to be replaced as they begin to scale. Today's brick is generally not yesterday's! Kind of like hardwood floors. Looks nice, but scratches, is cold and loud. But then carpet wears out just like wood needs refinishing.

fintail

The British twits especially like to mock the "cheap clapboard housing" in this region. However, it is made of a sustainable material, as you mention it can be engineered to flex, and it works well in this environment. I don't believe there is much structural brick made anymore - even in Europe, it is veneer with a wood or steel frame. From my experience, newer houses in Germany and Switzerland are miles above affordable new houses here though, definitely made to last longer. Here the lifespan of a house might be 75 years or so, and maybe a lot less in the south.

@slorenzen said:
Wood construction flexes really well...

fintail

True, but cash flow at the expense of who? Funny that these breaks didn't exist when the nation was less broke. What a coincidence.

The FIRE cabal definitely good at propaganda, just see their commercials and TV shows.

@berri said:
I can't think of many low tax areas that people want to live in. But, it's a nice subsidy for the FIRE industries

Tax savings can add cash flow to a person's budget. Tax deductions can be an advantage to a home buyer/owner. I think what the FIRE industries have excelled at is misleading buyers on what those advantages are really worth.

berri

Oh expense of other taxpayers, or deficit spending. But the US economy is heavily built on housing and consumer spending, right or wrong. Legally, it's just "puffery" and hype right?

fintail

Robbing Peter to pay Paul, perhaps.

It's funny that my German and Swiss (I hope to take a road trip over there again sometime soon ) friends have never mentioned owning a house, yet those I know in UK, Canada, and USA are obsessed with it. Maybe it's an English (and Chinese) language thing.

gagrice

@fintail said:
Robbing Peter to pay Paul, perhaps.

It's funny that my German and Swiss (I hope to take a road trip over there again sometime soon ) friends have never mentioned owning a house, yet those I know in UK, Canada, and USA are obsessed with it. Maybe it's an English (and Chinese) language thing.

In Germany it is a case of not wanting to be tied down, so they can get out. If you make much over the average in Germany they tax the crap out of you. It may seem ok now that the USA controls their ambitions of World Domination. I would like to travel to Europe to see the old castles etc. Never consider living there in a million years. You happen to live in one of those areas of the USA where renting is slightly less than owning. 90% of the USA is not like that. Most places you can buy a decent home for a fraction of what you pay in rent. Look at all the cities that are going through gentrification.

Example: the house my son finished remodeling is now on the market for $75K in downtown Evansville. Mortgage with no money down will be about $380 per month. Add another $120 a month for tax and insurance and your monthly cost is less than half the $1200 that house would rent for in a NY second. With renting these days the owner takes all the risks and wants double the value for taking those risks. Owning for most has economic advantages far above the piddly tax incentive for interest deduction. Most in the lower brackets don't bother to itemize as the standard deduction is better.

fezo

Just back from Cooperstown where I went with the only one of my four daughter's that caught my baseball bug. The Hall of Fame is stunning in itself and I need several more trips, but what great country t ride around in. 9% grades with curves, very rural - farms and forests. Driving the roads is like having a roller coaster with a steering wheel brake and a clutch and gear shift. Heap big fun.

The other amusement park ride you can do with a car id drive in NYC and play reverse bumper cars where the object is to just miss the other guy. Going through the Lincoln Tunnel I can feel my brain going into city mode. Every time I sneak through where a taxi or limo is trying to go I get points.

fintail

Or maybe they want to enjoy life rather than be owned by a house that they think they own. You know, travel, go out to eat, not be a slave to taxes and renovations, maybe have money to invest. Maybe some tax evading types are looking to get out, you know, those who make money based on an expensive to maintain system, then refuse to pay it foward. The US has such types, too - they escape to Singapore or Switzerland or Arizona or Florida. Everyone my age I know who owns is always dealing with some kind of repair issue - and of course, almost all of them also got mommy and daddy to put up a down payment or more (but they built it themselves! Really!). Germans pay more in taxes, but Germans don't worry about going broke via medical or student debt, the infrastructure isn't failing, and Germany firmly dominates Europe even though Murica still maintains a military occupation there that it simply cannot afford in the 21st century. Does USA control it, or does something control the USA who then does the bidding? Europe is also a good place for road trips too, as the scenery can be diverse and people know how to drive.

In my area, renting is still cheaper than buying as is the case in most bubbly markets. Pull out the offshore money and parental coddling, and it might be a little different. A lot of lucky boomers in some areas (like Seattle).

It was cheaper to buy than rent for my friend in suburban Atlanta, too. He had a 3 bedroom compressed oatmeal and plywood tract house on a quarter acre for the price of a modestly optioned E-class. He's back in Seattle and renting, not complaining about it.

@gagrice said:
Example: the house my son finished remodeling is now on the market for $75K in downtown Evansville. Mortgage with no money down will be about $380 per month. Add another $120 a month for tax and insurance and your monthly cost is less than half the $1200 that house would rent for in a NY second. With renting these days the owner takes all the risks and wants double the value for taking those risks. Owning for most has economic advantages far above the piddly tax incentive for interest deduction. Most in the lower brackets don't bother to itemize as the standard deduction is better.

gagrice

@fintail said:
Or maybe they want to enjoy life rather than be owned by a house that they think they own. You know, travel, go out to eat, not be a slave to taxes and renovations, maybe have money to invest. Everyone my age I know who owns is always dealing with some kind of repair issue -
It was cheaper to buy than rent for my friend in suburban Atlanta, too. He had a 3 bedroom compressed oatmeal and plywood tract house on a quarter acre for the price of a modestly optioned E-class. He's back in Seattle and renting, not complaining about it.

Lots of old neighborhoods in greater Seattle area, have old homes that do require more maintenance. Whether you are owning or renting you are paying for the upkeep. Friends I worked with in the Arctic bought an old Victorian home in Bellingham. They spent all their time off fixing that place up. Pride of ownership is part of the American dream. How many people spend money making their apartment special and a reflection of their creative person? Jamming people into apartments is a BIG part of the devolution in this country. Some apartment complexes that were really nice 20 years ago are now ghettos. Crappy building practices are not limited to single family homes. Most of the strip malls are ready to be torn down in less than 30 years.

berri

There are so many formula's to compare buying vs. renting and every one I've seen lacks some variables. I'm not sure the answer is patently obvious in most markets. Then you have to add the subjective aspects as well like gagrice and fin have pointed out - how much time do want to put into a place versus other stuff to do, ownership pride, etc. One thing for sure, the tax aspects spouting by the FIRE industry are generally a bad basis to make this decision imho and lead to some stupid overleveraging by some buyers.

fintail

It'd be cool to hit up those spots on a road trip. Impossible from where I live - you'd spend a week each way in transit.

A co-worker in PA is heading out to Wildwood in a couple weeks, that would be an experience.

@fezo said:
Just back from Cooperstown where I went with the only one of my four daughter's that caught my baseball bug.

fintail

Also lots of neighborhoods of houses built with better materials than those of later decades, and owned by people through the years who usually maintained them. There are some lovely areas of Seattle, but there's a price of admission.

Bellingham is a cool place for affluent retirees or public sector types - I think those are the main engines of the economy there. I went to school there, but moved away when I realized the limitations of the job market. You can still get a decent little house there for 250K, but for most, paying the mortgage might not be easy. I don't know about pride of ownership, rather than entitlement minded subsidized investment. I see a lot of owner occupied houses that don't show much pride. How many houses are really a creative reflection? Devolution, it'd be interesting to see when the devolution started, and when the country started subsidizing the tax incentives, with politicos droning on about an "ownership society". Refuse to pay property taxes for a few years, and we'll see who owns what. I think there was a decline in building standards starting after the war, when society became much more based on consumption and instant gratification. Some housing developments that were new and shiny 20 years are also ghettos today - take a road trip to Atlanta and witness the march of time.

@gagrice said:
Lots of old neighborhoods in greater Seattle area, have old homes that do require more maintenance. Whether you are owning or renting you are paying for the upkeep. Friends I worked with in the Arctic bought an old Victorian home in Bellingham. They spent all their time off fixing that place up. Pride of ownership is part of the American dream. How many people spend money making their apartment special and a reflection of their creative person? Jamming people into apartments is a BIG part of the devolution in this country. Some apartment complexes that were really nice 20 years ago are now ghettos. Crappy building practices are not limited to single family homes. Most of the strip malls are ready to be torn down in less than 30 years.

fintail

Well said.

Such incentives also help shore up bubbles, and probably contribute to deficits, too.

I wonder who takes better road trips, owners or renters

@berri said:
There are so many formula's to compare buying vs. renting and every one I've seen lacks some variables. I'm not sure the answer is patently obvious in most markets. Then you have to add the subjective aspects as well like gagrice and fin have pointed out - how much time do want to put into a place versus other stuff to do, ownership pride, etc. One thing for sure, the tax aspects spouting by the FIRE industry are generally a bad basis to make this decision imho and lead to some stupid overleveraging by some buyers.