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Thoughts on Relocation...

August 25th, 2008 at 12:52 pm

I thought my renter friends were moving to Oregon to pay cash for their houses and/or enjoy significantly lower costs of living.

I overlooked that they were doing it the American way. What they really wanted was a giant asset to borrow six figures against.

I mentioned more people seem to be moving back to the state, as prices lower, just as I expected.

But I just learned why some are resistant to the idea. One friend just mentioned "because I can not afford to sell my house."

I read that to mean, "I put 0% down and/or borrowed large sums against it.

Oh my. The thought hadn't even crossed my mind. You'd think I'd learn by now.

This person has a Cali job so they can't blame lower wages for not helping their SIGNIFICANTLY decreased cost of living.

No wonder so many people look at our young faces and big house and tsk tsk behind our back. It's the American way. They obviously have not paid close attention to our old cars. I can't imagine what they imagine we have been financing. Even dh's computer/video fancies cost little more than $1k/year. Nowhere near the realm of borrowing six figures for...

But yeah, the old fashioned way of buying a house - it doesn't occur to anyone we went that route. Put 20% down, pay down a 30-year note, and after 9 years or so you have some decent equity (we've paid off 30%, and even better the principal payments are increasing greatly now). While everyone is complaining that the sky is falling we are looking at our average 3% annual real estate returns and wondering where exactly the sky is falling.

Anyway, mostly I am annoyed by myself for being completely shocked by that comment. I will never *get* the masses.

------------------------------------

Reminds me though, if you were curious at all. We have been here about 6.5 years in our cheaper cost of living safe haven.

Before when people asked me where I Was from, I Was confused. Where am I from? You mean my real and true home or the place where I Was able to get a steal on my dream house, and where I now live, work and raise my kids? I am not really from here.

But it happened.

Just a few weeks ago someone asked me and the kids where we were from. "Sacramento" just rolled off my tongue.

It took a little over 6 years, but it's HOME now.

I realized to I have spent a greater part of my adult life here. Just about anyway. Maybe that's the tipping point. 18-24 San Jose. 25-32 Sacramento.

I haven't even griped much about the weather this year. I am adjusting...

& anyway, it's official. Dh lived in the same home from age 0-23 or so. Which may be a little extreme. But I lived in the same home from age 4-18. We both wanted to settle before our kids start school.

So now that BM is in school, I feel like we are stuck in a sense. We don't want to pick up and move. I think it is pretty official that we would like to stay put the next 15 years or so, until the kids are done with school.

We're boring that way. Wink

I guess while everyone is panicking too I am thinking it is nice my kids may afford to live in the area as adults after all. I think that is the greatest travesty where my parents live. We'll probably inherit millions in real estate. But really, we just wanted to live our adult lives where we grew up, without being slaves to mortgages/rents. I Feel lucky we only had to move 2 hours away. But I'd give up the millions to be able to drop in on my parents any time. *sigh* & I was sad it was looking the same for our kids. I had no idea where they would live. So honestly, I would love it if prices settled down for the long term. Not planning on going anywhere. That is for sure...

But yeah, I have as many friends here now as I used to back home. I know the lay of the land. I know short cuts when the freeway is backed up. I understand the local lingo. It took a few years, but I think I am feeling rather comfy here. Big Grin Which is good since I think we will be here a while.

IT wasn't long here before we realized we would probably never move back home (no matter what). Life is way simpler here. BUT it still took a while to get into that comfort zone. To appreciate the area for more than the affordability.

7 Responses to “Thoughts on Relocation...”

  1. Joan.of.the.Arch Says:

    Well, only as a result of the popping of this bubble do I even understand some of the things that were being asked of us when we re-financed our house in December '06. For example, I remember being asked by the bank, "Why do you want to refinance?" I was genuinely puzzled at the question. My answer was "to get a lower monthly payment, lower interest rate, and lower overall price paid." Even though the radio and TV airwaves as well as the internet were filled with ads encouraging people to crack into the piggy bank that supposedly was their house, I just could not fathom that many people would refinance to do just that --going deeper into debt to get money for today-- even if they would sink it back into their house in the form of remodeling and updating. So the question asked of me made no sense. Why does anybody refinance? For the same money saving reasons as I wanted to, or so I thought. Was I ignorant!

    Yeah, was I ignorant, but smart. A couple weeks ago I was in a bank and had to tell what my mortgage was. The banker smiled as she typed in the info. I said, "Yes, I think it's funny, too." And I really do. My mortgage is $298. I could probably collect beer cans to pay the mortgage if I had to. The banker had to call another banker on the phone. In the series of answers she gave that person I heard her say "298." There there was a pause and my banker's belly jiggled in silent, suppressed laughter. I know the person on the other end of the line must have said something. Maybe they only groaned and said, "Lucky jerk!" If they were laughing at me thinking of the wreck of a hovel I must own, oh well, then they could interpret my own laughter as laughing at them.

    Anyway, I, too, continue to be shocked at the hard places people signed contracts to be in. But I can't believe that number for your neighborhood could be correct. 1 in 3 in pre-foreclosure/foreclosure?!

  2. merch Says:

    I'm with you. I am one of those idiots who put down 44%. Why? Because I wanted to be below the jumbo loan amount which would have tacked on an extra .25% interest.

    So I settled with a 30 year fixed at 5.5%, no closing, and no points. In my neighborhood, I have one neighbor who has a lower mortgage then me. He has an initial mortgae for 250k.

    But most of my neighbors have around 480k in mortgage. I also know neighbors that had 400k plus in mortgage then took out 80 - 100k for pools, finished basement, cars, etc.

    So Monkey Mama, I'm with you. A house is not an investment or something to cash out, it is a place where you live. And everyone needs to live somewhere.

  3. baselle Says:

    Sounds like you will also be a part of a very rare event, not performed in California (or anywhere else in the US) by anyone for years: the mortgage burning party. If we are all here and still blogging, please invite us!

  4. monkeymama Says:

    Hehe.

    I am afraid that is MANY years away but we will have a giant pfadvice party if we are all still here. Woohoo.

  5. FrugalFish Says:

    I'm in SoCal and wonder occasionally what my average neighbors have done. Many who bought homes long ago refied time and again over the past few years. Everyone seems to have put in a pool, hot tub, covered patio, and bought a couple of very nice new cars. I'm sure a lot of that was leveraged from home values, just based on vague comments that were made.

    We haven't done anything expensive to our house, nor have we bought new cars. We've just stayed the course and paid down our mortgage regularly. The neighbors probably think we are really hurting if we couldn't afford to get money out for all the same toys.

    At any rate, I'm very surprised by how many generally sensible people seemed to have lost their minds over strange mortgages and easy HELOCs.

  6. merch Says:

    FrugalFish, in my county in Mass, the HELOC and mortgage are on line. It's part of the public record.

  7. monkeymama Says:

    I am not aware of any cities in California that make that info public. Not in Northern California (unless you are a realtor/real estate professional, you have access to the data then).

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