Monday, November 17, 2014

Irrational Exuberance

We almost bought a house. We were distracted by it for a week. We didn't think about anything else. We made an offer on it even though it really wasn't what we wanted. It had some things that were great, but way more things that weren't good at all.

To give you an idea of what the housing market looks like here, imagine this: most of the housing stock was built a long, long time ago, and much of it has not been upgraded at all. That means single-paned windows, no insulation, old plumbing, and mold.

This is NOT the house that we thought about buying. This is right down the street from us, in the neighborhood where we are renting. It was built in 1850. It is on the market right now for $595,000. Yup, you read that correctly. More than a half a million dollars. It does have 20 acres, but still, that's a 164 year old house. It currently rents for $2500 A MONTH!!!
This is the garden next to that old house. It's not fancy. The rest of the 20 acres is used for cattle grazing. Investors buy a lot of the houses here and rent them out to students. It's easy money. Yes, this place is rented to students. The house we crazily thought about buying had another interested buyer-- an investor. Of course.

We have not lost our enthusiasm. We are optimistic. We have a real estate agent who keeps us posted about all the new listings. We're ready. We were just a little bit surprised by our irrational exuberance about finding a house that wasn't even really close to what we wanted and making an offer on it. We set some rules. Now we just have to see if we can follow them.

11 comments:

  1. Not a good idea to buy soming like that, you have to fork out more mony in restoring it which I have just done to ours. Take your time and find something you both want or you end up wishing you had not bought it.

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  2. It sounds like it's a property bubble which has a risk attached as those things are all based on emotions of buyers with the potential to get popped. I wonder if homes on the southern Oregon beaches, like Bandon are that high. I know they aren't farther north. Hope you find the right place at the right price.

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  3. Amazing house prices. It wouldn't go for a fifth of that around here, except for the acreage.

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  4. An acre and a newly-minted manufactured home, though probably devoid of character, might be a short term solution, assuming acres (or lots) are available at reasonable prices. I know mfr'd homes aren't beeyouteefull, but hey...

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  5. Bill-- We were so glad that we didn't buy the house. It did have some nice points, but the bad really outweighed the good. We're going to practice patience.

    Rain-- The reason the market here is so high is because of the university. The surrounding communities are not nearly this high-priced. We like the town, so we're willing to wait for something that we'll love.

    Mark P-- If we were willing to go a little out of town in any direction, the prices drop. This is the influence of a university and students willing to rent houses that are absolutely shockingly bad.

    John-- We've been looking for that as well. Not much in the way land or lots within walking distance to town. We'd be happy to build our little dream house, if the opportunity presented itself.

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  6. Try to stick with your plan. I know it's really tough, but this (may) be the last place you buy so it should be to your liking.

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  7. It wasn't meant to be--fortunately. I am stunned at the R E prices. Sure glad I live in the poor state of Arkansas.

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  8. Scott-- Yes, we are pretty committed to the plan now. We do want this to be the last house we buy, so we are going to be very careful. The market is crazy here. Things sell fast, like in one day. So, we have to be very certain right from the start.

    Arkansas Patti-- We are a bit stunned by the prices here, but are grateful to not be looking in San Francisco, or our old home town of Santa Cruz. Those prices are insane.

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  9. My neighbors own a house in Arcata. Two of their kids went to college HS state it worked for them for several years. Now, they rent it out to students every year. They have to made at least one trip a year to make repairs to their already old house, made older by the students... I hope you find something you like.

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  10. Pat-- We are comfy where we are at the moment, so we don't feel pressured to leap into something. Maybe your neighbors would like to sell us their house. LOL!

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  11. You cannot make a house right for you if it is too wrong. I'd go with your patience pledge and not think of accepting something with too many things wrong with it.

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