Monday, May 25, 2015

A lovely weekend, and thinking about house buying

The extra bonus day makes all of the difference! It's been relaxing (haven't really done much, as Sam has a cold), but productive.

  • I made six dozen muffins yesterday
  • Picked & juiced all of our lemons
  • Picked all of the oranges (haven't tackled those yet)
  • Made zucchini bread from our homegrown zucchinis
  • Bought the boys new duvet covers. Sam's was 8 years old, and had some holes
  • Dealt with our lease renewal, or rather, kicked off the email to see if we can renew our lease for another year. 
  • Made 3 batches of homemade taquitos
  • Dropped a few things off to be altered. This chore had been on my to do list for months, but I've struggled to get there when they were open. Woohoo!
  • Returned some items at the mall

I've also worked out, enjoyed a few lovely dinners from M (salmon & corn, and a yummy shrimp & pasta veggie dish), and sat out in the sunshine reading my book. Relaxing & fabulous.

As it's time to think about renewing our lease, M & I have been discussing what the future holds for our housing situation here. We'd run the numbers a few months ago, and figured that we could potentially afford a $1.8M house (the very lowest possible price in our neighborhood, keeping the boys in the same school), once our stock options vest next year. This would align nicely with our rental agreement. However, when I looked up potential housing options for budget purposes, there's not a single home for sale in our school district for less than $2.4M. Wow. Quite a jump. Inventory is very limited where we are, to say nothing of the housing prices. This brings us back to what we plan to do next year when our lease expires. And, enormous amount of silent prayers & finger crossing that we can extend without too much of a jump on our existing rent this year.

I'm so grateful that we found an amazing neighborhood to live in (with extremely short notice) when we moved to California. But, now that we're stuck buying in the same district, it's very painful. Keeping the kids in the same school district is our number one priority, which means we have a lot of painful choices coming up. 

We could sell our house in Seattle (which is now cash flow neutral/slightly positive), and that would bring us quite a ways to closing the gap. From an investment perspective, I'm loathe to give it up. But, we have a year to decide, I suppose. Maybe more inventory will magically show up here. ;-)

What about you? What have you been up to on this long weekend (assuming you have one)? Has anyone tried any fun new recipes? I may try this recipe for homemade frozen pizzas.  


  1. $1.8m house? But they really cost $2.4m?? $6m in retirement? I didn't see the words Rockefeller anywhere.

    Good for you. I suppose.
    And I worry about my little life?

    1. I'm not sure what you're looking for. This is a blog where I talk about my financial challenges, & how we work towards our goals. Those goals & challenges may be very different than yours, which is great. Diversity of financial blogs is what makes them all great.

  2. Summer is notorious for a rise in housing prices. The inventory will be lower in winter, but you may have a better price. Less than perfect, but better price - almost perfect, but higher price.

    Can I ask why it is difficult to let go of the Seattle home? Do you think you might be moving back? If the cash flow if just around break even, I would be tempted to sell. If you do plan on moving back, you may not want to be in that neighborhood or have a big house to maintain at that point (assuming kids are grown and gone).

    1. Good question, and the same one my husband asked. ;-) I feel like it's a step backward from where we are now to sell it - we've turned it into an investment, and if there's any way to keep that investment & still buy here, I wanted to explore that. But, given the housing prices, it's incredibly unlikely we'll be able to do that. We have quite a bit of equity in the house, so we'll come out well when we sell.

      I don't ever see us moving back to that area. If we moved back to the Northwest, it will be after the kids, and may just keep our Oregon house as a semi-permanent residence, to be closer to my parents as they get older. We won't need to live in such an expensive neighborhood as the Seattle house, and that house is huge & we definitely won't need it once the kids are gone. Honestly, same argument for buying a house here. We only need something for 10 years, so it's hard to swallow such a huge commitment for such a short period of time.

  3. Difficult to live in such an expensive area, you are fortunate though to have great jobs which allow you to at least (hopefully on the new lease) afford to rent. Do you think you want to retire in the area? Long term if you did take the property plunge it is very likely you would do well but I cringe to even think what the taxes would be on a home that costly.

    1. We can definitely afford the rent (well, I shouldn't say that & jinx us), but I'm worried about the lack of available rental units in our district if our landlords are ready to move. (They bought the house as a retirement home, so the timeline is up to them, not us). We would be in deep trouble if they want to move in anytime soon, as there are currently zero houses for rent in our neighborhood. Back to the school issue, of course.

      We were just talking about retirement this afternoon. No, I can't imagine paying to live in an area as expensive as this without having kids in schools. Probably somewhere in California, but nothing as expensive as where we are now. So, we'd have the house for approximately ten years, while the kids are in school.

      The only advantage of buying (in my mind) is the stability of not having to rent. And, the investment opportunity, if the prices continue to rise.

  4. How long have you loved there? Is it almost 2 years? I would think that you would want to sell your Seattle home in the next year so you could claim up to $500,000 in profit tax free since it needs to be your primary residence for the 2 of the last 5 years to qualify for that tax exemption. Have you checked with your financial advisor?

    I think that if keeping your kids in your current school district is your most important thing to you, you probably need to buy. Can you buy your current rental?

    Do you think that the Seattle market will be better long term than your current area? I have heard that the Seattle market is really hot so it should be a good time to sell. Conversely, do you think your current area is in a bubble? If not, what other reservations do you have for buying? Are you worried about job losses? You have a plan for the down payment and 10 years is long enough to recoup your costs and realize market appreciation and tax benefits.

    I know its a lot of money but if I remember correctly, you are paying a lot for rent. With property taxes, how would your payment compare to your rent?

    1. Let's see - it will be two years in September. And, the tax advantage is weighing heavily on our mind. We will need to sell before next September to get the tax advantage.

      We can't buy our current rental - our landlords purchased it as a retirement home, and are waiting to sell their medical practice & then move to the area. So, the goal of buying would be to solve the stability/school district issue. There's also nothing else for rent in our area, which means if/when they decide to move, we'll be very stuck.

      I think the Seattle market is extremely hot. Our house is in a very small & desirable neighborhood near Seattle, so it's a very good time to sell. I hope that our current area is in a bubble, but the numbers say otherwise. I can't imagine that many people can afford a $2M+ house, but the sales records indicate otherwise. ;-) My concerns are: the sheer investment size, taxes, job losses, tying ourselves in to having to work like this forever, all of that good stuff.

      We're paying $5K/month for rent now (it's sadly, a great deal where we live) & a house will be substantially more. But, there will be some amount of income tax advantage, as we currently have almost no deductions.

  5. Those are big decisions. How soon can the landlord let you know? If you can get another years lease, you've got a year to work out the details.
    I'd probably sell the seatle house and start the process of looking, so you'd be ready if something comes up. You are in a very high end area, but your jobs also are paying well so...

    1. He said "yes", but needs to check in on rate & length. So, that's good. We do have good paying jobs, but $2.4M is going to be an enormous (& uncomfortable) reach, regardless. It's terrifying!

  6. I'm sure this is a hard decision, and spending $2.4MM is a big deal. Take your time. Hopefully prices will go down a bit...(at least one can only hope!) :)

    Your weekend sounded delightful! And the meals delicious!

  7. Yes, it’s good that you continue to explore your options. I think that's the wisest way forward. Two million might sound steep, but not when you've drawn up ways to assemble that much money, so to speak.

    Tasha Reeves @ WCMTG

  8. You say you have not done anything on your long weekend, but it looks to me like you accomplished many things. If the house in Seattle is only slightly producing income, then selling it might be a smart move. The boys are so happy in the school, so make buying a home there your priority. Let everyone know that you are looking.

  9. Don't lose hope. Housing markets can change fast in a year. Asking your real estate agent to watch homes under pending sale is always an option, since sometimes people back out at the last minute. Naturally, you'll want to look for active listings first, but since the housing market is so tight in your community, it is worth a try.