Relocate?
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.
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.
Comments
As it turns out, my plans actually ARE to move to Denver; the only thing the Seattle bubble did is kept me from buying a house out here for the few years I've been here. I'll move as soon as I've saved up a nice down payment and enough to cover some remodeling costs. Timing is probably a year from now.
If you really want to stay and can't wait out the market - I suggest buying land and building your own place. Land is always the first to come down in a bust, because builders have to dump their holdings/options to stay afloat. Then as building slows down, contractors are willing to work for less, and as we are already seeing, material prices come way down. This also allows you to build something you really like. Of course this means you have to be willing to build somewhere there is still land available at a reasonable price, which rules out most high end neighborhoods in Seattle (even after a bust).
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.
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.
But it does come down to what's best for you and your career. Good luck!
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.
When the really big earthquake finally comes and the entire western seaboard falls in the ocean making Denver oceanfront property
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.
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.
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.
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!
Denver was a city we considered as was Autin and Portland. In the end, you get what you pay for. Yes, you can buy a home for $200k in Minneapolis or Texas but then you're living in Minneapolis or Texas. In the end, life is a compromise and you find the compromise that suits you best.
I thought living in Minneapolis was an appealing prospect. At least it was the last time I visited the city, but that's just my view.
http://losangeles.craigslist.org/wst/rfs/333632576.html
Short of moving somewhere extreme like Alaska, or dangerous like Detroit, I'll pretty much go wherever the best job is. You spend the bulk of your time at work and it's hard to be really happy when your job sucks. And if your job sucks, I don't really think that owning a home will somehow make up for it. I guess that's just my opinion. I suppose there are people out there that are constantly haunted by the fact that they don't "own" their residence and don't care where they work so long as it covers PITI.