Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

45 responses to “Poll: Would you consider buying a home closer-in due solely to today’s higher gas prices?”

  1. Thomas B.

    For gas prices, no… for commute time, yes. But I wouldn’t trade safety for commute time or gas saved. I’d rather drive an hour to work in order to have the piece of mind that I won’t get robbed, stabbed, have my house burgled, or have to worry about my kids or have to worry about gangs and drug dealers.

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  2. JD

    Holy cow, have you ever been outside of the Seattle area? I currently live in Boston and it is not even as bad here as you make Seattle sound!

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  3. Yaoyao

    The choice lacks the 3rd choice:
    3. rent closer in, but not buy closer in/

    I chose 3 and am happy w/ it..

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  4. softwarengineer

    ARSENIC LEVELS ARE HORRIFYING IN DOWNTOWN SEATTLE

    The shipping hub in Puget Sound around downtown Seattle has created horrifying arsenic air pollution. Its especially bad the closer you get to the waterfront. Even as far as Kent valley, its a moderate concern….you need to get out to Covington or Maple Valley before it mitigates to light levels.

    The arsenic levels in Seattle are covered up by our local media, but if I owned a waterfront place in downtown Seattle, I’d keep the windows closed and use filtered air conditioning.

    Its especially bad for kids playing outside.

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  5. Jillayne Schlicke

    I like the Edmonds school district’s public schools and wouldn’t trade “closer in” for Seattle’s WASL scores.

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  6. Peckhammer

    ” I’d rather drive an hour to work in order to have the piece of mind that I won’t get robbed, stabbed, have my house burgled, or have to worry about my kids or have to worry about gangs and drug dealers.”

    Who are you? Jerry Mathers?

    You’ve got as much to worry about in your little safe haven as those of us living in the “Big City.”

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  7. Dave0

    I’ve only been looking close in from the start, so gas prices haven’t affected that. I voted yes however, since I think high gas prices help maintain a good resale value. Thus, I’d be more inclined to buy (as opposed to sitting out and renting) close-in with high gas prices because I think there is less chance of the price dropping. I know Tim’s already proven that it’s not rational to pay more to live close in with high gas prices. But the masses aren’t rational, and it’s about perceived value, not actual value. There are many people that would irrationally pay more to live closer in when gas prices are high, thus it will help close in properties maintain their value.

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  8. Thomas B.

    Comparing Seattle crime to Boston crime is as meaningless as comparing Seattle crime to Little Rock, Arkansas crime. Crime is a subjective value. Those that tolerate high levels of crime place a low value on crime statistics. Those that do not tolerate high crime levels place a high value on crime statistics. Personally, crime, education, and safety are high on my list. I usually find that people that make disparaging comments about low crime areas are usually jealous that “safe havens” still exist and that they are forced to live in higher crime areas. Otherwise, there is absolutely no reason to make snide comments about “safe havens.” It’s like being pissed off at someone that looks good.

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  9. Eleua

    Not a chance. Higher fuel costs make it harder for me to get to the city. Just the same, it makes it harder for the city’s riff-raff to get to my home. This is a good thing.

    It is just a matter of time before the WSDOT raises fares on the ferry system to compensate for the rising cost of diesel fuel.

    How much does an extra $100/mo take off the price of a home at today’s interest rates?

    The world is getting larger.

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  10. EconE

    I had already been expecting exploding gas prices…and I don’t think it is over yet.

    When I moved up here I actually wanted to do a sort of “social experiment”, living the downtown urban lifestyle and specifically chose the 2200 complex in order to absolutely minimize my “necessary” driving. Actually, to the point where I don’t even have to go outside to grocery shop (Whole foods really isn’t that expensive when you have a gluten free diet, could care less about the “gourmet” selections…and don’t eat much anyways), go to the bank, video store etc. etc. etc. I think that I’ve spent more time dusting and cleaning my car than I have driving it. In fact…I’ve probably put less than 1500 miles on my car in the last year…a good chunk of that to and from Pacific Raceways and on the track. I know…bad me…waste of gas. Fun though. :o)

    Would I pay 500k + property tax + almost $500 in homeowners dues for the 1BR I’m renting for less than $1700?

    That would be a resounding NO!

    Would the other people I know in the complex that are renting pay the asking prices? (Many have similar ratios as my rent)

    That would be No, No, No, No and No (I have discussed the subject with 5 other renters in 4 other units).

    So…as much as it would be a nice wet dream for the downtown/ballard/QA/cap hill/Phinney/Greenlake etc. etc. condo developers that people are going to buy up all the $500-$1000/psf condos that are either currently listed on the MLS or are being kept off the MLS by builders I just don’t see it happening.

    In fact…I dare anybody to try to figure out what the MOS of 400k+ 1BR condos actually is based on the last 6 months of sales. I think even Eleua would be surprised.

    For SFR’s…hard to say…it’s not as homogeneous a market as condos and far less overvalued IMHO. Not to mention…I actually miss working in the yard and having a view of trees and water rather than just a bunch of friggin buildings. Still I don’t think it will have all that much of an effect. Ego will keep asking prices high and sales down more than gas prices will.

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  11. Harley Lever

    If you look at gas prices alone it is not attractive, but if you consider the ability to only use one car or even better having no car at all, it is extremely attractive. Granted it takes a bit of a lifestyle change even to have one car, but it is completely doable for those who work and live in the city. Many Americans have already made some lifestyle changes.

    You can literally save $10,000/year/car.

    Average MSRP in 2008 = $28,000
    Average interest Rate = 6.78%
    =$6,612/year in Car Payments

    Insurance = $1500
    Gas = $3187 (15,000 miles/year @ 20MPG @ $4.25/gallon)

    =$11,299.50/year/car (not including mass transit costs – $720)

    The savings alone can buy you almost $150,000 worth of house/car.

    When you look at it from this perspective it is a completely different story. You can bet that skyrocketing gas prices will further change people’s lifestyles. It is already happening and the fact that 33% of the people responding to this poll have said they would move closer in cannot be downplayed.

    It is much easier for a urbanite to have no car or one car than it is for suburbanites.

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  12. wreckingbull

    Taking out a loan on a $28,000 car is probably one of the worst financial blunders someone can make. One can easily find a very reliable, low mileage vehicle for under 10K. At that point, just pay cash. This has been my modus operandi for the last 20 years. Insurance will be closer to $800/year.

    With this in mind, the higher cost of living in an urban center really does not pencil out for me. To each their own. I just don’t enjoy piling on top of all my fellow citizens in a dense urban core. I would much rather be able to sleep with the windows open.

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  13. Jonny

    I did a search on the MLS and found 44 listings in King County Priced between $500k and $1,000K with the key word “short.” Of those 44, six were mentioning “subject to short plat recording.”

    Not very many short sales listed in comparison as to how everyone is talking on this site.

    Can another agent verify my findings?

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  14. NotaBull

    “With this in mind, the higher cost of living in an urban center really does not pencil out for me. To each their own. I just don’t enjoy piling on top of all my fellow citizens in a dense urban core. I would much rather be able to sleep with the windows open.”

    I’m with you there. Regardless of the increased level of amenities, I just personally don’t like the increased density that this requires.

    Moving down to one car is certainly a bit more doable in an urban area compared to suburban. But even if you don’t have kids, having only one car would be a hassle. Yes, you can take the bus, or get a taxi or something. But it’s still a PITA.

    I travel every month or so for business. I’ve been screwed too many times by taxis that don’t turn up on time to worry about getting a taxi to the airport. I don’t want to wait for the bus at 5am (when I usually leave) and arranging the airport shuttle is also annoying and less reliable than me just getting in my car.

    While it is certainly more economical to only have one car, it’s a hassle that I’m not willing to entertain regardless of whether I live in urban or suburban areas. Maybe when I’m retired and am more likely to constantly be in the same place as my spouse… That would be a different story.

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  15. Rafael

    http://articles.moneycentral.msn.com/Investing/SuperModels/BadTimesForGoodCompanies.aspx

    I wait a year or so before buying anything!!

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  16. Garth

    I have lived in the most protected of local suburbs and in some perceived negative areas in the city near aurora as well. On MI I was the victim of a car break in where they stole some CD’s, when I lived in bellevue someone tried to steal my car but the battery was dead, and after 7 years of living 2 blocks from 85th and aurora 2 months before I moved my car stereo was stolen.

    I think the suburbs / city question needs to be broken down into the type of areas as well. Living in apartments or condos in downtown bellevue or kirkland is alot like living in fremont or belltown. Neighborhoods in north seattle are very similar to bellevue and the surrounding areas. The suburbs have lost some of their cost advantage as most of the big box stores are now close to city dwellers too. 10 years ago the shopping experience in seattle was much different than the eastside, now if you want all the same options are available in city.

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  17. nathan

    Is Elizabeth Rhodes a regular around here?
    Will gas prices drive homebuyers away from suburbs?

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  18. Rafael

    That is great idea to move close to work but what if you get laid off! In these uncertain times I would not buy anything. The next thing to go is “jobs”. The credit bubble is unraveling and it is going to cause lot of grief.

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  19. JD

    Thomas B wrote: “Comparing Seattle crime to Boston crime is as meaningless as comparing Seattle crime to Little Rock, Arkansas crime. Crime is a subjective value. Those that tolerate high levels of crime place a low value on crime statistics. Those that do not tolerate high crime levels place a high value on crime statistics. Personally, crime, education, and safety are high on my list. I usually find that people that make disparaging comments about low crime areas are usually jealous that “safe havens” still exist and that they are forced to live in higher crime areas. Otherwise, there is absolutely no reason to make snide comments about “safe havens.” It’s like being pissed off at someone that looks good.”

    Crime is crime nomatter what city you live in. Saying crime is subjective is just ignorance and says a lot about someone having never lived or experienced any other way of life.

    I have lived in Singapore, San Francisco, Boston, Boise, Atlanta and San Antonio and each city has its own crime problems. In Boise they feel that the ‘gays’ are a problem for the city, in the southern areas of Boston you can hear gunshots nearly every night.

    Even though Boise and Boston may have vastly different views about what problems their cities have it does not mean the crime is subjective. A gunshot is a gunshot, a mugging is a mugging, a burglery is a burglery.

    About the only thing subjective is how those in each city view diversity, different life styles and others.

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  20. b

    As has been said in these threads before, closer in to what? Making a buying decision to live “close in” to the center of Seattle might make sense for someone who is 99% sure all of the jobs they will have while living at that residence are going to be in downtown Seattle. For someone like me who is in software development, no such luxury is afforded. Most tech workers are also in the same position as I am. You should buy in the area/neighborhood you like and has the amenities you need for non-work lifestyle. For some that is Bellevue, some its in Ballard and some its out in North Bend. Purchasing a home long term based on where you current job is currently located is quite stupid. You might end up buying a condo in Belltown and finding yourself working in Redmond 2 years later, contemplating suicide on your drive everyday.

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  21. Anonymous Coward

    Since when does everybody work downtown? I’m a Boeing engineer and I work in Kent. I’ve got a 4mi bike ride. If I tried to move “closer in” I’d have to *start* driving AND pay more for housing.

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  22. NotaBull

    “You can literally save $10,000/year/car.
    –snip—
    The savings alone can buy you almost $150,000 worth of house/car.”

    Let’s use some more realistic average numbers. Instead of paying $28,000, let’s say you buy that same car 2 years old for $20,000. Also, you trade in your existing car and get $5000 for it. So you’re financing $15,000 over 5 years.

    That car insurance figure you quoted is way too high. For *both* of my cars, I pay $93/month, $1116 a year, for both the wife and I. The newer car is a little more of the premium, so I’m going to approximate that this 2 year old car is going to cost $50 a month to insure: $600 a year. This is entirely reasonable. It’s what I pay for a 2 year old Subaru.

    My Subaru gets about 24 MPG combined city/highway driving. This is about the average mileage these days, and with gas at $4.25, only an idiot (or rich person) is going to head out and buy a car at 20MPG so that’s not a reasonable figure to use. A reasonable person will buy something that gets 25-35MPG, IMO. I’m going to say they buy a Subaru and get 25 combined. Also, the average mileage for a car is much closer to 12,000 a year.

    You didn’t include maintenance and registration, and I think that should be included. I think I pay about $120 for tabs on the Subaru. Maintenance is pretty cheap as it’s under warranty and they’re not expensive cars anyway. For the last few years I’ve budgeted $125 a month for both of my cars and that’s always worked for me. So I’ll assume $750 a year for that, for one car.

    -Car payments $3540/year
    -Insurance $600/year
    -Gasoline $2040 (25MPG, 12,000 miles a year at $4.25)
    -Maintenance $750
    -Licensing $120

    Total is $7050 vs your $720 transit costs, gives an additional approx $6300 a year in costs for the second car.

    If we translate that into additional payments on a monthly mortgage and scaled the payment up, say 20%, because of the additional tax deduction on the additional interest we’ll pay, we get ($6300 * 1.2 / 12) $630 a month in extra mortgage payment that we can afford by going down to one car. This translates into about an extra $100,000 that can be borrowed assuming 30 year 6.5% mortgage. $100,000 is a lot of money, but not huge, and you have to live on one car for the next 30 years in order to do it.

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  23. NotaBull

    “As has been said in these threads before, closer in to what? Making a buying decision to live “close in” to the center of Seattle might make sense for someone who is 99% sure all of the jobs they will have while living at that residence are going to be in downtown Seattle. For someone like me who is in software development, no such luxury is afforded. Most tech workers are also in the same position as I am.”

    The wife and I are in technology/wireless. We decided to move out to the Eastside because the majority (not *all*) of the tech jobs are on the Eastside. We decided that in order to live in the area we wanted to live in we’d attempt to ensure that we always worked on the Eastside so we didn’t have to deal with the bridges. Right now, I work from home and the wife has a 5 mile commute.

    Dude, we’re like SO close in!!!!

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  24. NotaBull

    “Since when does everybody work downtown? I’m a Boeing engineer and I work in Kent. I’ve got a 4mi bike ride. If I tried to move “closer in” I’d have to *start* driving AND pay more for housing.”

    Anonymous coward, although you *think* you work in Kent, you don’t really. In reality, you work in the Boeing factory in Pioneer Square. You also enjoy visiting the art museum on a daily basis, and enjoy the opera every Friday. That’s why you live in Ballard. OK?

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  25. NotaBull

    “Poll: Would you consider buying a home closer-in due solely to today’s higher gas prices?”

    I think the more correct question to ask based on the poll responses (including mine) should be:

    “Poll: Who owns real-estate in Seattle proper and hopes that higher gas prices will mean less depreciation on their property compared to everywhere else?”

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  26. EconE

    Harley Lever said…

    “the fact that 33% of the people responding to this poll have said they would move closer in cannot be downplayed”

    and of course these polls are the thing to rely on when buying real estate.

    On the flip side (pun intended)…I think that there are plenty of readers that are holding on to extra in-city condos. You know…like Realtors. And they are the ones choosing “yes”.

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  27. jcricket

    As econE points out these polls are scientific (nor are any on the Internet). The Seattle Bubble blog, like most blogs, attracts mostly like-minded readers/commentors. We all enjoy an echo chamber, but it’s important to realize that sentiments expressed there-in are rarely representative of the spectrum of opinions out in the real world.

    And also, rarely does anyone on a blog (writer or commentor) actually put forth a truly scientifically analysis (myself included). Despite that, the certainty expressed in blogs/threads is probably greater than anyone doing actual research to back up their ideas. Related to that, people who are expressing certain doom about the housing and economy (not just declines, but 20% on the dollar, mass unemployment, etc) would do well to read up on Malthus (http://en.wikipedia.org/wiki/Malthus) and how many of his “mathemetically proven” predictions/rules turned out false or implausible over time.

    Personally – I think there will be a balance, long term, in housing trends. Some people will want to move closer in, because of commute time (as Tim pointed out, the gas costs aren’t all that much, even at $6/gallon) and perception related to gas prices, etc. Some people will want to move farther out (cheaper real estate, get away from hustle/bustle, perceived or real crime). If close-in real estate goes up, it’ll price some people out. If far-out real estate goes down, it’ll become more attractive. If we build light rail to the suburbs, some people will take that and drive less, but still enjoy their suburban lifestyle. It’s not either-or.

    With the exception of the great migration that happened post WWII, I doubt we’ll see any massive shifts in living/housing choices. Just maybe some subtle changes over time. Return to city living for some. Differently designed suburbs (more small-towny feeling maybe) for others. More mass transit with park and rides rather than just roads. Not catastrophic for anyone.

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  28. Reality check

    Can you put price on kid’s expenses also? :) Safety? Guarantees that you are going to work in this close in place for 35 years :) Life is not only $7050 vs. transit cost :) Are you going to ride a bicycle with your 2 mo old baby back and forward to day care and work? Do you know how much is a day care cost? Do you know how much a day at Zoo cost? Do you think “low” rent in luxury condo of 800 sq ft close to restaurants, work and really expensive grocery stores is the best if you have two kids. No one even mention health care cost, because even with the best insurance that you employer could give you with kids you have to consider these costs. So, price of gas? Really? Compare to what I said –nothing! Europeans survived, and they are even punished with other high prices.

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  29. Yaoyao

    We are 1-car household and walk to work. We love it. But buying downtown in this market? No. Our jobs move, we move, kids’ school needs change, and gas prices change. Paying huge premium for this many uncertainties is not worth it.

    Also, losing 1-car doesn’t save that much either. Being there, done it.

    Softwareengineer: where can I get asenic data? thanks!

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  30. Ira Sacharoff

    jonny,
    The vast majority of short sales don’t say ” short sale”, they say ” subject to lienholders approval” or ” subject to third party lienholders approval” so…
    Including single family homes and condos, I counted about 600+ properties in King County that are currently for sale, subject to lienholders approval. 161 of them are in the City of Seattle, with a lot also in Kent, Federal Way , and Auburn, and a smaller number in Renton, Bellevue, Kirkland,Maple Valley and others throughout the county, including Covington, Black Diamond, Newcastle, Issaquah, Sammamish, Kenmore, Vashon, SeaTac, etc.

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  31. Beating a Dead Horse: Gas Prices | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.

    [...] ← Poll: Would you consider buying a home closer-in due solely to today’s higher gas prices? NWMLS: Sales, Prices Bump Up Ever So Slightly in June [...]

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  32. Thomas B.

    JD “Crime is crime nomatter what city you live in. Saying crime is subjective is just ignorance and says a lot about someone having never lived or experienced any other way of life.”

    I was trying to be gracious, and agree to disagree. I’ve lived in several different cities and small towns. I’ve lived in towns where it’s okay to leave your door unlocked, but I’ve also lived in cities where it was unsafe to walk alone at night. Yeah… duh… crime is crime. But some people choose to ignore crime, especially in cities in exchange for other intangible benefits. I personally would never live in Belltown due to the crime, but there are those would would rather live there rather than a safer suburb. Crime is an absolute statistic. What weight a person places on the statistic in choosing a place to live is subjective. Of course, this is complex idea that escapes some people.

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  33. Harley Lever

    NotaBull,

    You are too funny!!!

    I am sorry that the FACT that the average MSRP for a car is 28K does not fit your argument. If nobody purchased new cars than what complete morons those car manufacturers are for making those millions of cars each year and having those thousands of dealerships.

    The AVERAGE MPG is below 20… sorry again that this FACT so inconveniently goes against your argument. http://www.hybridsuv.com/announcements/best-suv-gas-mileage

    Correct me if I am wrong, but you did have to pay for your trade-in… or are all trade -ins free? I guess that might help your argument too.

    I guess what is most frustrating about this blog is the overwhelming desire to discount facts that do not “fit your argument” and then come up with theoretical assumptions such as “Putting 20% down on your house” which is atypical of most borrowers.

    Lastly, I would like to remind you that historically homes have increased in price. With that said, I would gladly throw my $100,000 in savings towards an appreciating asset like a house over 30 years than a car. Yeah, I know, 1969 Ford Mustangs are worth a lot of money… I am sure that fits your argument well so why not use it.

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  34. Harley Lever

    Reality Check,

    Your kids will cost you regardless of where you live. My advice, don’t breed.

    You have no guarantee you are going to work anywhere for 35 years. Using your train of thought, why would you buy a house at all then?

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  35. Harley Lever

    Notabull,

    You have proved my point. You moved to the east side where many of the technology jobs are.

    The fact that Seattle has 41% of the jobs in King County would also lend itself to the idea that people, like yourself, would prefer to live near their jobs.

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  36. Harley Lever

    EconE,

    Sorry that the poll results do not fit your argument. I guess it was you that hit “no” 66% of the time then right. Let us all know which facts you approve of and which ones you do not.

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  37. notabull

    “I am sorry that the FACT that the average MSRP for a car is 28K does not fit your argument. If nobody purchased new cars than what complete morons those car manufacturers are for making those millions of cars each year and having those thousands of dealerships.

    The AVERAGE MPG is below 20… sorry again that this FACT so inconveniently goes against your argument. http://www.hybridsuv.com/announcements/best-suv-gas-mileage

    Correct me if I am wrong, but you did have to pay for your trade-in… or are all trade -ins free? I guess that might help your argument too.

    I guess what is most frustrating about this blog is the overwhelming desire to discount facts that do not “fit your argument” and then come up with theoretical assumptions such as “Putting 20% down on your house” which is atypical of most borrowers. ”

    Harley, you’re an idiot. That link is a link of MPG of SUVs!!!! The average MPG of CARS is certainly NOT below 20 MPG – it’s actually at about 25MPG right now (including SUVs). Anyone looking to buy a second car is not going to buy an SUV and is much more likely to buy a used car. You do know that most people buy used cars, right? And I’m sure you know that most people are not buying SUVs right now, right?

    Wow, you really are clueless.

    Pay for my trade-in? What are you talking about? Your argument was about getting rid of a second car. If that’s the case then you actually have a car to GET RID OF. That is the trade-in. Therefore, the opposite of what you’re proposing (getting rid of the 2nd car) is to replace it with another car.

    There is absolutely nothing wrong with my calculations and they are far more accurate than yours. Face it, your calculations are wrong. Your insurance rates are about 3X what most people pay. Your MPG is lower than most people get. Your mileage is higher than average mileage. Your figures are incorrect, and you are an idiot for trying to back them up with your stupid post.

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  38. Harley Lever

    NotaBull,

    I didn’t mean to make you cry.

    “actually about 25 MPG”… that sounds pretty factual… thanks for the lesson on “facts”. You make me point and laugh at the screen.

    You make “trading in” a car sound like a windfall that has never cost you anything. You trade-in is what left of your ever-depreciating asset.

    So you can get 1 years worth of full coverage insurance on a late model car for $500/year. SIGN ME UP!!!!

    I used $4.25/gallon… that is extremely generous. Should we consider $5 or $6. We are definitely moving in that direction.

    Even with your overly pathetic manipulation of facts you still prove that you can buy another 100K worth of house. So should I leverage a 100k in a house which has historically appreciated or should I pay out 7k per year for the next 30?

    And I’m the idiot….

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  39. NotaBull

    “Even with your overly pathetic manipulation of facts you still prove that you can buy another 100K worth of house. So should I leverage a 100k in a house which has historically appreciated or should I pay out 7k per year for the next 30?

    And I’m the idiot…”

    No, you’re the one that was so stretched for cash that in order to buy a place in an area you liked, you decided to lower your standard of living and get rid of one car. Personally, I bought a place in an area I love and I kept both cars.

    Obviously getting rid of one car saves you money, but my original point was that your saving figures were 50% inflated. $1500 a month to insure a car, for example. Are you even old enough to drive? Have you ever paid for car insurance? Then sending that link of “average MPG” but it’s a link of SUVs!! How could someone be *that* dumb?

    From Wikipedia article:
    “Overall fuel economy for both cars and light trucks in the U.S. market reached its highest level in 1987, when manufacturers managed 26.2 mpg (8.98 L/100 km). The average in 2004 was 24.6 mpg.[20] In that time, vehicles increased in size from an average of 3,220 pounds to 4,066 pounds (1,461 kg to 1,844 kg), in part due to an increase in truck ownership during that time from 28% to 53%.”

    Huh, seems I was about right. Assuming that we’re buying slightly less SUVs these days (which is a fact, read the news) we are indeed averaging “about 25 MPG” for the entire FLEET INCLUDING SUVs. I just didn’t have the exact 2008 figures, hence my estimate. Just because it’s an estimate doesn’t mean it’s not based on historically accurate figures.

    I mean, if you hadn’t used bad figures you might have actually convinced someone with your arguments. After all, $100K is still a lot of money. But your use of figures that most people immediately decided were suspect just makes you look like you were trying to validate your own decision.

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  40. Harley Lever

    Notabull,

    Thank you for actually coming up with a fact.

    Can you read? It was $1500/year. I am sure you are smart enough to do some quick math and realize the insurance would have cost $18,000 based on your mistake and/or inability to read. Are you old enough to read?

    Show me any one who is selling full coverage insurance on a 2008 for for $500/year. And I am the one using bad facts?

    I purposely trimmed down my estimates to avoid moronic responses like yours. I guess that was a waste of time

    The average MSRP in 2008 is 28k sorry that it doesn’t work for you.

    The average gas price is $4.37 in Washington. How is $4.25 inflated by 50%. Plug $5 and $6 into the equation.

    I decided to purchase intelligently and I still have two cars. We are thinking about getting rid of one, because we barely use the two we have. I put 4,000 mile on my car last year.

    By the way my property value increased $12,000 in 30 days and the Neighborhood is up 6% YOY. I think you might want to hold off on slamming anyone’s intelligence.

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  41. EconE

    “By the way my property value increased $12,000 in 30 days and the Neighborhood is up 6% YOY. I think you might want to hold off on slamming anyone’s intelligence.”

    We have our new “Shug”!

    Zillowmania!

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  42. NotaBull

    Harley, OK, you’re probably not stupid, but you’re still a fool.

    I made a mistake with 1500 a month for insurance, I meant to say 1500 a *year*, which was your original estimate.

    Want to know who is paying $500 a year to insure a 2 year old Subaru Outback (which was my example)? ME! ME! ME!!!! Not $1500 a year, and not $1000. But $500!!!! That’s for myself and my wife too.

    My low rate is likely because I live in a safe area, keep the car in a garage, have no incidents on my driving history, am married, am not 21 years old, and because I have the house insurance policy with the same insurance carrier.

    So you drive 4,000 miles a year and you’re using 15,000 miles a year for the gas price estimate to see how much an imaginary person might save if they got rid of one car? I think the overall point that you’ve successfully made is that people who actually consider getting rid of one car really don’t use one of their cars very much, so the *actual* savings of getting rid of it based on gas prices and maintenance just doesn’t add up to much. Now, if that 2nd car is fairly new and it’s sitting their depreciating then by all means just ditch it. But if it’s fairly old and your insurance rates are low, then why not keep it.

    Using Zillow estimates to talk about how much your house value has increased is not the best way to demonstrate your intelligence.

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  43. Harley Lever

    NotaBull,

    So you use your stellar driving record, your marriage status, the fact that you live in a safe area, keep your car in a garage, and have a 2-year old car to demonstrate that “everyone pays $500/year for full coverage insurance on band new fully financed cars”. You accuse me of being off base?

    I agree that zillow is not the best measure of home value. Like most Bubbleheads, you would gladly use the information if it supported your point. However I have been watching several sites for months and their numbers have been in line with much of the data the Tim has been producing.

    I was driving 18,000 miles a year before I moved to Seattle. Even with the average of 12,000 miles per year my point is still made that you will have an extra 100k worth of buying power. If gas goes up in price, you will pay even more further making my point.

    You still can’t deny that MSRP is $28k and $4.25/gallon is generous. The bottom liine is shedding a car is easier for urbanites and they can leverage the savings for at least a 100k worth of buying power (based on your manipulation).

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  44. NotaBull

    “You still can’t deny that MSRP is $28k and $4.25/gallon is generous. The bottom liine is shedding a car is easier for urbanites and they can leverage the savings for at least a 100k worth of buying power (based on your manipulation).”

    That MSRP for a NEW car is correct. Most people do not buy new cars! Notice that I said MOST people, not ALL people. Of course SOME people buy new cars otherwise nobody would make new cars, as your previous redundant comment mentioned.

    $4.25 is a decent gas price right now for sure – no disagreement there. As to whether it will go up or down, it’s hard to say. Oil prices seem to be stabilizing and have gone down signifcantlt in recent days. Hard to say. I’d give it a 50/50 chance of it being higher this time next year. Betting that gasoline princes will continue to go up with this kind of meteoric rise *forever* is like betting that house prices will go up 10% a year forever. Not gonna happen.

    My insurance rates are not uncommon – only younger and riskier people pay much more than I do, or they’re with the wrong provider. My parents in law pay even less than I do. When I lived in the city of Seattle, my insurance was little higher, but only by about $50 a year. Mostly it’s about the car you drive, how safe you are, and if you’re the kind of individual that needs minimal deductibles because you can’t save a dime for rare situations.

    Yes, $100K is still a lot of money. Just 33% less than the figure you gave.

    I’m not a bubblehead. I own a house and have done for years. I would never use Zillow to measure what my house is worth. In fact, I’ve never even looked and I never will! Instead, I would monitor local and recent sales and perform an actual analysis. Using redfin or other online tool, it would only take an evening to get a pretty good estimate of the value of my house.

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  45. To Harley and Bull

    What are you saying is that “poor” people that are losing 100K on their homes due to the bubble should just get rid of one car and they will be OK. 200K -just take the bus:) 500 a year is not a good full coverage. If you have a “house” , “garage” and “stellar” record it is not a rocket science to get a good quote and something is missing:)
    Interesting enough -I live in Kenmore, bought a house 2006 and I cannot buy the same house for this price today. Even with , short sales around or 3-5% off of the asking price.

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