It Really Is The Bottom Line

There's a certain comfort to the rituals that we all engage in.
One of my own is the Sunday browse through the MLS with a big latte', hopefully conducted before anyone else is awake so that I have blissful peace and total self-indulgence. I started this ritual right around October of '01. At the time, I didn't believe that I had decent enough credit or a large enough income to qualify for a mortgage, but I enjoyed looking and thinking about the various areas in the greater Sacramento metro, and seeing what people had done with their properties and what the trends were in renovation, etc. As Fate would dictate, even though I adored the job I was holding at the time, outside forces compelled me to seek another position and suddenly I was earning enough to actually afford to buy a house. My RE agent and his mortgage broker both assured me I qualified for quite a bit more house than I really wanted to take on, and eventually I ended up with an entirely reasonable mortgage on a nice condo about 10 minutes from my job.
Over the years, I continued to browse the MLS and noted that prices seemed to be going up a lot. A co-worker advised me about 2 years into my mortgage to refinance, because interest rates had dropped and equity had increased, and I could get a lower house payment. Amazingly, this was true. I also took most of the equity out at that time, in order to pay off about 50K in combined student loan and credit card debt, which gave me a little bit bigger house payment but I got rid of hundreds of dollars of monthly payments and saved thousands in interest that I would have paid out over the years. A year later, I decided I needed to make a change in jobs again, and accepted a position that paid less but was much less stressful. I also took a month off, and my friend and I went to an SCA "war" in Arizona with friends, and then met some other friends in LA and stayed in Hollywood for a couple days while visiting the Getty museum. On the way home, the Sig and I stopped in Santa Barbara for a day on our "Sideways" tour of wineries. In order to take that month off and that little vacation, I again refinanced and took out about 10K, probably the most foolish thing I've ever done, and also probably worth it for my sanity's sake. On the up side, about 4 months into my new job, I was offered the exact same position with a different employer who was willing to pay me the prevailing wage for my years of experience and I again ended up earning a very good income and benefits, and vacation time.
A year into my now very satisfying (financially and professionally) job, and still reading the MLS, I began to think that I needed to move. The Sig and I had to walk the doggies four or five times a day, from our top-floor condo. Our guest bedroom had gotten cluttered with exercise stuff, SCA stuff, archery stuff and books, and we had to store most of our camping stuff in a storage facility a few blocks away for about $100/month. We had ambivilent feelings about the condo community, which consisted of some really great people and some really crazy ones. And I was also paying attention to a guy named Bonddad from DailyKos who was saying that there was a housing bubble. I didn't understand "bubbles" at the time, but I knew people that had lost homes in the 80's and 90's due to ARMs and felt an aversion to them. I also knew that people were spending a lot of money on cars, trucks and furniture and that most of the houses on MLS seemed to have been upgraded with new kitchens and baths and pergo floors lately. I decided it was a really good idea to sell, and once again my same RE agent and his same mortgage broker associate told me that I'd qualify for about twice as much as I could afford. Only this time, I didn't want a condo, and that left us looking at houses that were horribly disappointing. Out of about 10, only 1 of them made us feel like buying, and someone beat us to it, THANK GOD. Once the condo sold, and we had 30 days to find a place, we decided to try renting a house instead and we were very pleasantly surprised at the variety and cost. It was a no-brainer at that point.

Nowadays, after having rented for about 18 months so far, it's still a no-brainer. Only now, instead of mortgage brokers telling me that I can afford a 500K house with no money down with a 610 FICO, they're telling me that they'll lend about 250K and I have to have at least 5% down to get a 6.25 % interest rate first mortgage with a 10% second mortgage for the remaining 15% down. 10% is a little high. IOW, I need 20% down now to qualify for a reasonable interest rate for about 2.5 x my income, and the only reason I can even get a 10% rate on a second mortgage is because my FICO is now around 800. And no guarantee that those interest rates and the down payment requirement will stay where they are until the houses that I am interested in drop into the 250K range, which will probably take at least another year or two. (And the mortgage broker I spoke with kept emphasizing "and of course we will need proof of your income".)

So, think about this, home sellers. Really think about who is out there to buy your house, and what they can qualify for, and whether they can REALLY qualify at all.
It's a damn shame that so many people made so much money on this Ponzi scheme for so long, and that you didn't. But the fact is, you waited too long. If you really do need to sell these days, you have to be willing to accept an awful lot less than some people got in 2005 or even 2006.

As for me, I could have done better. I could have another 10K in the bank right now, if I'd not have taken that month off between jobs and that very frugal camping trip to the SCA Estrella War and to LA (Travel Lodge, not Hilton) for Sig to see Grauman's Chinese Theatre and the Walk of Fame and "Hollywood" sign. But I can't really complain, because I bought that condo with no money down, a marginal FICO, and 50K debt. And I am now debt-free, with a few thousand in a money market account, and a FICO of 800. And being debt-free, after 20 years of struggling to pay off debt, is such a wonderful thing that there is no way that I am ever going to pay more for being able to say that I "own" a house than I would pay to rent that same house, minus tax and mortgage interest.

I still maintain my ritual of MLS browsing. And I've developed a strong interest in modern architecture and design. I still have my very short list of Streng homes on the MLS in neighborhoods where I would probably be one of the higher income residents -- not ones in Davis or Arden Park, where I'd be the poor kid on the block. Sometimes, one of these homes that I track goes off MLS, and I usually go to check on it when I find myself in the area, to see if it looks empty or if it looks sold. And if it looks sold, I never feel sorry that I didn't put an offer in, even though I do feel sad when I take it off my list. I tend to think that in another year or less, I might just be seeing it on the MLS again. Besides, even though they really aren't building more Strengs, people still do sell them, and when one door closes another door opens. My list has been pretty stable at about 5 houses for the last six months, from a high of about 12 houses a year ago. And the bottom line is that no matter how much I like a house, if I can't afford to buy it and still eat and enjoy a few weekends in Tahoe or Monterrey or a yearly vacation to see family back east, then it's not worth it.

Gardener Included

When we made the decision to rent our current place, it was after we'd looked at probably 5 or 6 other houses. Our criteria were relatively simple: safe neighborhood, fenced in yard, no really big dogs in the neighboring yards, not near a school or church (traffic).
Every place we looked at had fencing falling down, including this one. Every house we looked at had a large dog in the next yard, some of which were busily engaged in trying to dismantle the fencing (which they had nearly done in a couple of the places), including this one.
But by the time I drove all the way up to El Dorado Hills to look at this place, we had a good grasp on the typical rental yard size, and it seemed to go down as the size of the house went up. The biggest house we looked at, in Roseville, had the smallest and most useless yard. One of the reasons I sold my condo was because we wanted a house with a yard, for our dogs (very tiny dogs, 13 pounds and 8 pounds) .
And this house had YARD. Man, did it ever. The front yard was about twice as big as the entire yard of the McMansion in Roseville, and it had a walkway meandering through it and a little alcoved patio just Bistro table sized and perfect for sitting at and watching the neighborhood. The backyard was like a park, complete with trails and a little bridge, and a small barn-like outbuilding that we later discovered had power and lights.
So, it was easy to ignore the big dogs in the yard behind the house, because there was a little ditch and a gravel drive between the fence and the main yard, and the rear fence was very sturdy and reinforced with heavy metal posts as well. The side fencing needed some repairs, which we figured we could easily do. Our main concern was the extensive gardens and landscaping, because I have a bad back and bad knees (I used to ski and mountain bike) and Sig has two fused vertabrae in his neck and isn't supposed to be doing much lifting and hacking. But, according to the property management company, "Gardener included" in the rent.
So, we jumped on the rental and felt pretty good about it. And we didn't expect any gardeners to show up until later in the spring, when it stopped raining. But spring turned into summer and we still didn't see any gardeners, and the pathways were beginning to get over-run with vines and bushes. One of the trees appeared dead, and there were several large, heavy branches hanging over the rear patios (there are four patio areas at this house and one deck off the upstairs master bedroom). The rose bushes were going nuts. There isn't any lawn at this house, a great blessing that I have come to really appreciate, but things were growing in the multiple flower beds that I wasn't sure were supposed to be growing there. So, we called the property management folks and asked when, exactly, the gardeners were scheduled to begin.
And a day or so later, the owners of the house showed up. THEY were the gardeners. And they're very nice people, but they're not spring chickens, either. Their first "gardening" went well enough, and we found out which plants were good and which were unwelcome, and how to turn on the irrigation system, and that the tree I thought was dead was always the last tree to leaf in the spring. Sig felt very uneasy with the owners working outside while we sat inside playing computer games, so we had to go out and "help". A few months later, they came back and we all raked and blowed the leaves into about 25 large yard leaf bags, and they cleaned the gutters. This spring they came back, and did some weeding, and they were going to fix the trellis that had fallen over the shed door due to the weight of the roses on it. They said they'd be back in a couple of days, but they never did come back.
By now, we had purchased a wide assortment of clippers and trimmers and trowels and shovels and rakes and brooms and a wheelbarrow and a leaf blower. And we just hacked the roses down so that we could get into the shed, and let them kind of fall to the side. It isn't quite as lovely as the heavy spray of flowers over the shed door, but it's a lot less deadly. Sig had mentioned mulching the large side yard that's outside the side fence. There are several neighbors facing that yard, and their yards are very tidy. The side yard looked kind of desolate and forsaken. The landlord told Sig that the ivy that was growing in the front/side yard would eventually work its way around and that mulch wasn't needed.
So, Sig went to Home Depot and bought mulch. He bought over 30 large bags of redwood mulch. He didn't know that it would be cheaper to just order a truckload of the stuff to be dumped. He's from New York City, for pity's sake. The side yard looked great when he had finished, and the neighbors made a point of telling him so. "We didn't want to wait for the ivy to cover it", he told the neighbor. "I've lived here for over 15 years and the ivy has NEVER covered it", the neighbor replied.
Then, early this summer we went out into the front yard and pulled out a lot of creeping, tangled prickly things and dried weeds, and discovered the front yard irrigation tubing and fixed some of it. And that was pretty debilitating, to tell you the truth. We were pretty gnarly that day.
And today, I went out to do a little "spot" weeding and discovered that a large evergreen bush on the side yard was growing down so far into the roadside ditch that it was impeding the flow of the run-off. The main street into our neighborhood is along that side yard, and all the run-off goes down that ditch. I had to pull out mats of weeds that were growing in it, and then Sig came out with the power trimmer and we hacked and pulled and cursed and sweated and finally got the damn drainage ditch clear.
And yesterday, Sig fixed the front door. The landlord had attempted to fix it a few months ago, but his repair job only lasted a week or so. The front door is very nice, a big double door with a thumblatch handle that you depress and pull to open the door. Only, the latch was broken. So, even if the door was unlocked, you couldn't open it from the outside. It bugged Sig to no end that he had to keep letting people in the door. We decided to just fix it because the last time the landlord had not really fixed it, and he'd been here for hours. Sig bought an entire new kit for the door, with deadlock and handle and knob. All we needed was the handle, but they don't sell just handles. You have to get the whole enchilada, and it isn't cheap.
We also have ductwork that periodically becomes detached from where it is supposed to be, and the two front (west side, with really big windows) bedrooms get no cooling at all. We didn't realize this until a relative came to stay with us just as the summer was really heating up. And we also have periodic problems with mineral deposits in shower heads and the kitchen spray faucet. I really suspect that the hot water heater is getting ready to go belly up. And the garage has a horrible odor. When we first moved in, we thought it was probably from a dog that was probably kept in the garage. It's not. We don't know what it is. There's a crawlspace next to the garage -- which is where the handyman who came out to "fix" the ductwork went. ("I have to come out here a couple times every year. They really need to just put in new ducts," he told Sig.) If you leave the door from the garage to the den open, it will stink up the den. There's a pantry off the den that smells very faintly of the same odor.
If this was my house, I'd either fix these things -- and in the case of the ductwork, for sure I'd fix it -- or I'd deserve to live with them. But it's not my house. Sig feels that we should just go ahead and hire a landscaper. But we can't afford to do that, which brings up rant #2 for the month of September: when we first moved in here, we were saving about $500 a month. Now, we are unable to save anything. Zilch. We are racking our brains trying to figure this out, and the only thing we can figure is that gas, food and utilities must have gone up. We don't eat any different than we always have, and nothing else has changed. A year ago, I wouldn't have batted an eye about hiring a landscaper. But after wrestling with the household budget for the last 3 months (when I first started noticing that money was leaving faster than it was arriving) it's obvious that we don't have any money to waste on someone else's house, and that perhaps one of the reasons we aren't able to save money any longer is because we are spending it on fixing the house, fixing the yard, and tools for fixing the house and the yard. For a house that isn't ours.
So, I'm kinda peeved at this notion that renters are evil people who will tear up your house and who will make neighborhoods deteriorate. I'm sure that some renters are like that, but in my experience, and this is not the only landlord/tenant situation I've been in, the problem lies more with the OWNER. They usually don't want to pay anything out to maintain their rental property. They no longer take pride in it. They resent you if you call them to report a problem. They want the monthly rental check, and otherwise they want to forget that the house or apartment exists.
I love the yard here, and we aren't strictly speaking playing "by the rules" either. I have a young family member staying with us (we have 3 bedrooms) so that she can afford to attend college, and we didn't bother to notify the property management company or get permission from the owners. We figure the owners aren't going to care, as long as we're quiet and clean. And the property management company would only want another $50 to run her credit, which is silly, since her income has nothing to do with us renting this house. I hate moving, and it's expensive to move. You never get your full deposit back, no matter how clean you leave a place, and before you even get your partial deposit back you need to pay your new landlord a deposit and first month's rent. It's very expensive to move when you're renting. It was my goal to ride out the housing storm in this house, for the duration.