Relocate?

[small_far_ugly]

Question:

At what point will my fellow bubble watchers give up and move to, say, Denver?

I'm curious because I'd like to know your thought process. I'm considering the same thing, because I have a serious objection on principle to paying based on price rather than actual, intrinsic value. So no, a half mil for a basic 1000 SF brick 3 bedroom house is something I'm never going to do.

I'm just trying to decide when to say "OK, I've had enough" and move someplace else. I do enjoy Seattle and have a fantastic job (my dream job, really), so it wouldn't be easy, but I'm not intent on renting forever.


What are your criteria? What's your timetable?

By the way, I do realize that this is an outgrowth of the 'priced out forever' arguments, but that position has increasing validity at the moment considering that prices have just about zero downward momentum.

[LotharBot]

[uptown]

[small_far_ugly]

Good question, I forgot to mention more about my background. I've lived here for 8 years or so, but I was a student most of that time and never had the money. I was in college at the time of the dotcom bust, and didn't graduate until prices started running away.

I do like it here pretty good. It's a comfortable town and I enjoy it, although it isn't 'world class' I like living here.

The buy and build option sounds intriguing. The problem is, I'm still on the entry level end of things, meaning I'd like to keep it all under $350k or so. And anywhere in the midwest or atlantic seaboard, that would buy me a palace, so there's the apprehension.

I can wait out the market, but the problem is I'm not sure it's going to go down; nobody is. Current trends argue that it won't (against all logic, I should add) If I had some confidence that prices would be restored to a sensible level, I'd be fine with waiting a few years.

But I could wait a few years and have prices higher still than they are today. Even the most strident bubbler can't ignore that possibility.

[Alan]

Every morning the current trends suggest that it is going to get hotter and brighter forever and that the Earth is going to be consumed in a fiery blast of death.

Fundamentals suggest that around noon, it will start getting darker and while the temperature will keep rising for a few more hours it will eventually cool off again.

[uptown]

I'm sure it's going down. I'm old enough to have seen a few bubbles and they all end the same way.

But it does come down to what's best for you and your career. Good luck!

[Puget Sounder]

If a SFH that's not in Rainier Valley or a bad part of Lake City is over 4x me & my SO's six-figure combined salary (which will hopefully be higher in 5 years) we're going to look at St. Paul, Portland, or Denver.

I'm pretty much in the situation as small_far_ugly -- I graduated in 2004 and got an entry level salary that would have swung a 1 bedroom condo on the Eastside. At the time, I hadn't started dating my (serious) significant other (girlfriend) who works in roughly the same field and graduated from college in 2005. So -- there was no way I could sanely have gotten into the appreciating housing market in 2004, since I had no down payment and my parents weren't about to kick over even a 10% down payment to buy a place.

Per Salary.com -- which I regard as somewhat more amusing than useful -- I can make the same salary in St. Paul or Portland as I can make in Seattle. The median salary is within $1000 of being the same, as are the 25th & 75th percentiles (I have a background in accounting/financial reporting, not IT/programming).

And I used to live in the Midwest and would certainly consider moving back there. The winters should keep the Californians at bay.

[WetCoaster]

[small_far_ugly]

Sounder,

Im in the same situation...well into the 6 figures combined, got a down payment, but I simply won't pay $300-350k for a shack when I know what's available in Minneapolis.

I'm sure you've looked around on Craigslist, it's an eye opener.

She doesn't want to leave, but it's a financial reality to me, unless the prices move downward.

[Puget Sounder]

I like Minnesota a lot. Dad was born in Rochester and went to Carleton College in Northfield. He & mom now live in eastern Washington and enjoy 300 days of sunshine per year and are 30 minutes from Lake Chelan.

Colorado would be fun too, I wouldn't mind some of the best skiing in the world within easy driving distance.

Regarding Craiglist -- I've done quite a bit of looking, and have found no compelling reason to pay $350k for a crackerbox in Georgetown, or worse yet, $475k for a similar crackerbox in Ballard, which would quadruple my commute time as well.

[small_far_ugly]

See what 350 gets you in

Minneapolis...
http://minneapolis.craigslist.org/rfs/333011120.html

http://minneapolis.craigslist.org/rfs/332900533.html

(amazing!)

Denver

http://denver.craigslist.org/rfs/333171716.html

http://denver.craigslist.org/rfs/333082623.html

Seattle

http://seattle.craigslist.org/see/rfs/332950251.html

http://seattle.craigslist.org/see/rfs/329462898.html

Is Seattle THAT special? Minneapolis has a similar gravity to it in that people tend to go there, be happy, and stay for 30 years. I know many of them myself. Denver's so-so for me, looking at what you can get in those cities for a 'small' amount of money just blows my mind.

I'm going to wait a couple of years, advance in my job, and see if the market here drops. If it does (or I find a place that seems reasonable that I like) I buy and stay. If it doesn't, I pack up my bags and head out. The market in Minneapolis is going nowhere over the next 2-3 years, I've got nothing to lose.

I just wonder how many people in Seattle are deciding the same thing, and if we'd be looking at a mass departure of educated/professional people. The Boeing layoff in the 70s had the same effect.

[TJ_98370]

Everyone has to evaluate their own personal circumstances when deciding if / when to move. As a kid I remember my father once received a job offer in New York City with a significant pay raise. He did not accept the offer for several reasons but one of the major considerations was that cost of living was much higher in New York than in the Pacific Northwest at that time. My point being that cost of living is a legitimate concern when considering to relocate or not.

My personal strategy is that I am going to wait out the Seattle bubble (and there is a freaking bubble). Real estate prices will correct. My circumstances are probably a little different from most bubble watchers on this blog in that I am bit older and further along in my career (read - it's more difficult to change) and I have family here that need my personal assistance.

Also, I believe it unrealistic to expect real estate valuations to depreciate quickly. From what I have read, that just doesn't happen most times. Real estate in Japan has depreciated since the bust of their bubble in 1990, for about about 17 straight years. The good news is apparently there has been a "flattening out" in real estate values in Japan recently.

....Experts in the Japanese real estate market agree that the rapid rate of decline in land values is flattening out. Koji Takeda of Yamate Homes, a local real estate agent, tells us, "The price of real estate has dropped every year for 13 years due to the recession and delayed disposal of Non Performing Loans (NPLs) held by major banks. Now that land prices are at a 20-year low.....

http://findarticles.com/p/articles/mi_m ... _111506874

Remember, Japan is basically a group of islands with the total area of about the size of the state of California and is therefore especially vunerable to the "they aren't making any more land" perspective. If Japan can have an extended period of real estate depreciation, someone please tell me how Seattle is different!

[GetMeTheHellOutOfCA]

[Puget Sounder]

[Lionel]