Coffee heat rising

Real estate

Derailed Day

by

Well, a LOT got done today. But none of it was anything planned. All the schemes on the schedule for this day were totally derailed.

All I wanted to do was paint the east wall. Yesterday I bought a gallon of good-quality paint at Dunn-Edwards, plus a roller designed for use on cinderblock.

Some years ago, Bila the Bosnian Painter (my favorite painter) covered the Funny Farm in the color I craved. He repaired and painted the trim. And all was well. Toward the end of the job, I reminded him that I wanted the wall facint the road along the east side painted to match the house. He’d…well…sorta forgotten about that and was running out of paint. So he diluted what remained and sprayed it valiantly upon the wall.

It looked OK. For a few months. But shortly it started to fade. A couple of strokes where he’d squirted it especially exuberantly with his sprayer retained the color, but mostly it looks like somebody tried to tag it with graffiti. Altogether lacking in panache. So: today was the day to get rid of that.

But.

I overslept. Didn’t get out of the sack until 7 a.m., about two hours late. Then, stupidly, I started the day by farting around on the Internet: reading the news (such as it is), answering the emails, screwing around on Facebook.

Facebook has got to be THE biggest timesuck ever invented by the mind of Man.

At some point, I stroll out in the garage, and out of curiosity decide to see whether the defective hatchback gate on the Venza has decided to work today.

It has not.

In fact, instead of JUST not working in the punch-a-button automatic mode, it now is unusable in the manual mode, too. If you open it manually and stick your head into the back end of the car, the damn thing closes on your neck.

Back to the Internet. Cruise around for quite some time before I find the symptoms described, not in any official way but only by other hapless Toyota owners.

(You may be sure I will NEVER buy another Toyota again. I probably never will buy another car again.) It’s either the struts (cost to repair: $3,000 to $4,000) or the lift motor (cost unspecified).

I do not, do not, do NOT ever want to deal with Bell Road Toyota again.

By now it’s around 10 a.m., so I call my  mechanic, Chuck. Reach his partner, Pete.

Can they work on the car on the extended warranty?

Not sure, sez he. Depends on who the warranty is written with. This is not specified in the effing crooked paperwork.

Call Camelback Toyota. Get the service manager there. I say I bought the car at Bell Road and never want to do business with them again. Like everyone who has ever heard of Bell Road Toyota, he laughs and says ,”Yeah, I hear ya!”

Bell Road’s reputation precedes it…. Too bad it didn’t precede into my precincts before I bought this car there.

He says that for the repair to be covered, I have to have bought “Platinum” coverage. This of course sounds like an excuse not to cover it. He agrees the struts cost three to four grand; if it’s the motor, says he, that’ll be around $2,500. I say I’m living on Social Security and can’t afford that, so if it’s not covered, then I have a “new” car from Toyota that will always be defective. I mention Funny about Money; I describe the number of readers who see it, by subscription, through Facebook, and through Twitter, and I suggest yet another report on the Venza interlude is not the best thing for Toyota’s good name.

He says, “WAIT, DON’T HANG UP! Give me the VIN and I can find out what coverage you bought.” I figure there’s a good chance I did shell out extra for this, because the SOB who tied up my entire afternoon high-pressuring into every extra charge Toyota could dream up probably added that on.

Camelback Toyota guy rummages through his computer and says it looks like I probably have the coverage. (I read this to mean “I’m going to talk my boss into covering this, if I can, on the grounds that it will support the company’s goodwill.”) We agree that I’ll bring the car in on Tuesday for them to figure out what’s wrong with it and decide whether they’ll do the job as warranty work or if they’ll try to give me another royal screwing. If the latter is the case, then the car will just go through the rest of its life without a functioning back hatchback door.

Fvck.

By now it’s around 11 a.m. I haven’t even had my customary pot of high-test coffee, to say nothing of anything to eat. I’m too effing mad to eat, though.

But the dog food is running low and I should’ve made a new batch yesterday so I decide to haul the bag of defrosted pork out of the fridge and cook up some more chow for the corgis.

I grab the baggie full of pork and…S-L-O-P-P-P!

Red, bloody juices squirt out of the Ziplock bag. A lake of red bloody juices spreads across the glass shelf occupied by said baggie. It cascades down the inside walls and floods the shelf below, and from there drips down the back of the fridge to puddle on the ledge behind the produce drawers and drizzle down into the bottom of the refrigerator, soaking the styrofoam thing behind the produce drawers.

What. A. Fvcking. MESS!

Most of the refrigerator now has to be taken apart and sanitized.

This chore occupies the better part of an hour. But — look on the bright side! — it does force me to collect and throw out a lot of unidentifiable rotten stuff.

That’s good.

I guess.

Now I get on with cooking the dog food. This is not a difficult job, but it’s messy. And just yesterday the kitchen counters were scrubbed clean and polished to a high glow. By the time I finish, of course they’re covered with grease. So I not only have two dirty pans to scour and the food processor bowl to wash and the giant mixing bowl to wash, I also have to clean and polish the tile. Again.

Residing in the blood-washed fridge, not yet spoiled, are the remains of a roast Costco chicken carcass. Royally tired of meals from this tasty but oversalted treat, I decide to cut off the meat, run it through the food processor, and add it to the dog food.

This almost doubles the amount of food today’s creation yields. But in the process of course I cut myself with an ultra-sharp kitchen knife. While I’m elbow-deep in meat. Cooked meat. But still. Meat.

I soldier on till the job is done. Then head back to the bathroom, un-bandage the other cut finger (which also has been bathing in bloody pork juice and chicken grease), grab the antiseptic wash the Mayo Clinic gave me, and scrub the bejayzus out of my hands. Apply new bandages to cut fingers. Pray (or whatEVER) for the best.

Clean the kitchen.

I still haven’t had breakfast.

Nor, BTW, have I performed my most recent self-appointed regime: the daily dog-hair cleanup.

Realizing that one could theorize that part or all of the old-lady vertigo I’ve been enjoying could be blamed on allergies and the resultant stuffy head that has plugged my ears to the point where I can barely effing HEAR, a week or so ago I threw out the 10-year-old pillows, replaced them with new uncomfortable pillows, washed everything on the bed and subjected it to mite-killing ironing from a Shark set at “blowtorch,” cleaned the floors until you could eat off them (safely!), and took it upon myself to run the dog-hair-catching bed throw through the dryer EVERY day and, also, EVERY day, to dust-mop the floor with a microfiber rag.

This has made a huge difference. As we scribble, I’m Benadryl-free and nose-squirt free, I can breathe, I can hear, and my head is not spinning anymore.

You would be ay-mazed at how much dog hair and dust settle on a tile floor in any given 24-hour period. Yesterday the floor was not only dust-mopped but vacuumed and wet-mopped. At around noon or 1 p.m. today, this is what came up…

doghairYuck. No wonder my head has been stuffed up. You can’t even see the skiff of dog hair in this image.

Fixed breakfast/lunch. Really didn’t have much in the house to eat. Did not feel like eating at all, much less scarfing down the usual mid-day feast. Microwaved two pieces of high-end “Sunday” bacon (reliably delicious) and fried up the rest of the frozen hash browns (reliably fattening). Consumed the desired swill of coffee.

Pal who’s a mortgage loan officer surfaced on the phone. He’s trying to get ahold of M’hijito. I and said Mortgage Pal are trying to move the kid to refinance the downtown house NOW GODDAMN IT BEFORE THE RATES GO ANY HIGHER.

The house has a 30/15 mortgage on it. We signed up for this instrument back in the day, before we realized the economy was skateboarding toward Hell and when we thought we were getting the place on the downtick, yea verily maybe at the bottom of the market. We figured M’hijito would stay here for a three to five years, until he got back on his feet; then we would sell the house, he would repay my grubstake, and he would have enough saved and in profit from the sale to go back to San Francisco, where he belongs.

Wrong.

Wrong.

And Wrong.

We still own the house. He still has his miserable job. He has no hope of ever being able to return to the City, where housing prices are so far out of reason that Donald Trump Himself couldn’t afford an apartment there, and he has despaired of ever getting another job worthy of the astronomically expensive elite college degree that he possesses.

It now looks like he will still be living in the house when that 15-year balloon comes due. And Mortgage Pal and I are dead certain that the crazy low interest rates will be long gone by then, and historically “normal” rates will be back.

Let me put it this way: when I bought my last house, my Realtor and I were beside ourselves with JOY when I wangled an 8.25% rate. We thought that was almost too good to be true. The ex- and I had paid rates as high as 13%, though 11% was more typical.

That’s t.y.p.i.c.a.l…

Getting the kid off the dime has been a bitch of a challenge. This afternoon in chatting, Mortgage Pal (who’s almost as venerable as I am) realized that 11% rates are outside the range of the next generation’s experience.

They just don’t get it. They don’t understand that the low rates we’ve seen over the past many months are FREAKING BIZARRE, and that one of these days (soon, with Trump in office) we will see rates go back to historically “normal” levels. Which ain’t gonna be 4.75%.

Hassling back and forth between those two consumed a fair amount of the afternoon.

Have I painted the wall?

No.

Have I taken the dogs for a walk today?

No.

It’s almost dark. I better go do that…

We’re in the Money…

by

For the moment…

This morning the Dow was at 19,000! When it goes wacko like this, my fund will make 30 grand in a month. Woot!

Unfortunately, it’s likely as not to lose 32 grand the following month…but let’s not think about that.

Ha ha!! In amongst the stupid chatter to this YouTube video is One (count it: 1) truly inspired comment:

Sonic Ryan 1992
What it feels like to be a post-graduate who finally got a good paying job.

What I’d  like to do is tell my guy to SELL NOW! Convert about half our holdings to cash; then invest the remainder aggressively for another month or two (maybe six, at the outside), then shift that to the money market.

My son has dragged his feet on refinancing the downtown house. It frosts his cookies to have to pony up more cash to principal, and an extra layer of frosting is applied by the prospect of having to pay mortgage insurance (we don’t, on the current instrument). But I  believe the house’s value will soon rise enough to give us well over 20% equity (it’s probably that high now): the housing market is exploding, his neighborhood (as I prematurely predicted) is gentrifying, and as demand rises, so will prices.

So I’ve sicced a friend who’s a mortgage broker on him, hoping that this time around he’ll kick into gear and get that thing refinanced. The problem is, it has a 30/15 loan on it. In 2020 — just  four years, about the time I expect the Trump economy will tank — we’ll be forced to refinance or to sell. We took out that loan, which had exceptionally favorable terms at the time, because he planned to stay in Phoenix just long enough to get back on his feet after being laid off at the tail end of the Silicon Valley bust, save some money, and then go back to San Francisco. It hasn’t worked out that way. Inertia set in, and he seems to be happy enough to stay where he is.

For the time being.

At any rate, it’s hard to believe that in just four years, he will have been in that house for 15 years. Tempus fidgets, eh?

Not real thrilled, myself, about being over the barrel now to get that place refinanced. Rates are already rising, and they’re expected to head straight for the stratosphere. I expect by 2020, we’ll be lucky to get an 8% loan.

When I bought my first house here in the ‘hood, that’s exactly how I felt: very lucky to land an 8.25% loan. Everybody cooed about what a great deal it was. I only owed $80,000 on the house, and the payments were over half my take-home pay. Imagine the payment on a $180,000 loan at 8% or 9%? We are gonna see a WHOLE lot of people who simply can’t afford to buy real estate at all. Ever. And a lot who will go belly-up. Again.

Interesting times, hm?

How are you planning to deal with all this…interest?

Tempus Fidgets

by

Sometimes it’s hard to believe how fast time flies. The older you get, too, the faster it seems to fly.

Neighbors catty-corner across the street are getting ready to move. Their Realtor has stuck a “For Sale” sign in the front yard with a “Coming Soon” addendum. This seems to be the newest style: sticking up a sign before the house is actually listed.

Out of curiosity, though, I looked it up on Zillow, mostly to see if the out-of-state landlord who used to own it still did own it and had gotten lucky with the tenants.

Apparently not. Looks like the folks who live there probably own the place. They (or someone) bought it in 2010.

The previous owner had purchased it in 2004, right at the run-up to the Bubble. That, by coincidence, is when I moved in here: twelve years ago!

Can you imagine? I can’t… TWELVE YEARS!

The neighborhood has really changed since I moved over to this street.

The New York landlord rented that house to Queer John and the Boys, a funny but off-the-wall bunch who, not having any ownership interest in the shack, never did anything to fix it up. Queer John was a sweet sort of down-at-the-heels guy, assertively gay and friendly on his good days. Not all his days were good, alas: he suffered from bipolar disorder, so his ups were stratospheric and his downs were subterranean. In a manic phase, he went out and bought two identical SUVs and shortly was pursued into the ‘hood, driving a vehicle that had something caught on the rear bumper, by three squad cars, a paddy wagon, and a couple of motorcycle cops.

{sigh}

One evening Queer John and one of his roommates had a home invasion. They claimed three guys and a woman had broken in, the men by forcing their way in the front door at the same time the woman and the third guy climbed in an unlocked back window. One of the men chased him up and down the street waving a pistol, until Dave (proprietor of Dave’s Used Car Lot, Marina, and Weed Arboretum) came outside and scared the perp off.

They called the cops, who, seeing QJ’s flaming queerness (he really could be pretty flamboyant), refused to pursue it. They said QJ and roommate must have hired the woman and gotten rolled by her pimps.

We think not.

Another day, the Psychotic Son-in-Law, spouse to Other Daughter (the Cat Lady), went fully ballistic when Queer John told Pretty Daughter’s girl and boy child (at that time, yea verily 10 years ago, they were still children; they lived next door to the rental) that they could swim in the house’s pool, as long as their mom or another relative was present. Son-in-Law jumped to the conclusion that Queer John intended to molest the children and charged over there threatening to kill QJ and anyone else who got in the way. It took some doing to call him off and stuff some meds down his throat.

So on the Night of the Swarming Cops, poor old QJ was hauled off, never to be heard from again. The New Yorker rented the house to a pair of slobs. The woman worked for Bobby McGee’s, a local fixture-type restaurant. Apparently she used to bring the garbage home, because she’d show up in my alley with the trunk of her big old Buick-like tank of a car chuckblock full of stuffed trash bags, which she would jam into the garbage bin shared by me and Sally. It used to enrage Sally. I just thought it was weird. They were weird. WT in the most classic sense. They made Queer John and the Boys look genteel.

Eventually the New Yorker sold the house, at a significant loss (the crash having crashed by then), and these quiet people moved in. They haven’t done anything to make the house look any better, but at least they keep the yard tidy and their behavior is plain-vanilla.

In those days, Carlos the Knife would chase his 80-year-wife Inez and his daughters around, brandishing the kitchen cutlery. And he thought it was funny to let his daughter Maria’s batshit crazy mutt out. The dog chased Pretty Daughter’s girl child up a mailbox column; I shouted the dog down and chased it off long enough for the girl to get back inside her house with her little dog.

Carlos and Inez have since passed away. Maria lost the house, and a lively couple with four cute kids bought it. They just finished painting the house a pretty color. The kids are the center of everyone’s attention down in this corner of the ‘hood. We love them.

Son-in-Law succumbed to his schizophrenia and moved out from Other Daughter’s care. That was probably good for OD, but not so great for SiL, because she did take care of him. At one point the cops swarmed into Terri’s yard so as to jump her fence into OD and SiL’s yard, because they thought he had killed her.

He had not.

It’s mighty quiet down there now, except for the stray cats.

Dave, proprietor of the used car lot, marina, & weed arboretum, also lost his house. He’s living in a condo not too far away. A bottom-feeder picked up the deed off the courthouse steps. His crew cleared out the toxic waste, and he sold the place to a woman fix-and-flipper, who came in, painted, put in a new kitchen, renovated the pool and the yard, and sold the place to a pair of accountants with a teenage son. Son is now in college, the house is weed-free and tidy, and no junk is parked in front.

Sally moved to an old-folkerie some months ago, selling her house to a young couple who plan to have four children. Last month they produced their first. They updated the interior a little but have done nothing to the outside, which could use a new coat of paint…but it’s not too bad.

Pretty Daughter’s kids are grown. The boy has gone off to school in Flagstaff. The girl, alas, fell in with bad company and dropped out of high school. Two young men are living over there now, allegedly the girl’s cousins. Haven’t seen the girl for awhile, but (admittedly) haven’t looked. The guys are a hoot, though.

A whole lot of young people have moved into the ’hood, and they’re doing great things to the place. Most of the houses are hugely improved, with new paint jobs and freshened up yards. Some people have gone so far as to bulldoze the gravel “landscaping” and replace it with actual lawns — that’s nice! Presumably this bunch is paid well enough to afford the water bills. 🙂

The lightrail is now running. The city pulled out a row of houses facing Conduit of Blight Boulevard so as to lay tracks and new utility lines. This looked like a disaster at the outset, but the new young residents, who have the energy to fight city hall and some of whom must have some clout (if for no other reason than that they’ve organized a very active neighborhood association), managed to wrangle the city into building a wall between us and Conduit of Blight and even got them to landscape it!

So our part of the train route looks a lot better than it did. It’s annoying to hear the train honk every few minutes…I’m so glad I moved away from there. If I’d stayed in my first house, I would’ve been about four lots away from that thing, which would have made the war-zone traffic and cop noise just that much worse. One of several reasons I moved was the prospect of two years of train construction, to begin with the demolition of houses on my street and to end with a boondoggle train blatting its way along from five in the morning till midnight…make that 3 a.m. on Saturdays.

The new young residents call the cops on the hookers, which of course keeps the cops busy. But I haven’t seen any of the girls flagging anybody down on our side of Conduit of Blight recently. There’s a linear red-light district about a half-mile to the west of Conduit of Blight, conveniently passing behind a school. Must be nice for the ladies…they can drop the kids off on their way to work. The City keeps promising to clean it up. We’ll believe that when we see it.

The whole neighborhood is looking a lot better, all spruced up the way it’s getting thanks to the young urbanites.

The house that’s about to go up for sale is now valued at about $378,000, which is insane. I bought my house for $235,000, and it’s been renovated. That place, I think, has not — or if it has, the wear and tear has done worn and torn it.

Well, it may be crazy, but if it sells for anything even in that ball park, it won’t be turned back into a rental. With any luck, that house, too, will get a paint job and a fix-up.

That’s the news from lovely uptown Phoenix, where mediocrity is a virtue and all our children are below average.

 

 

A Little Luck, A Little Smart$

by

lightrail-Phoenix_Exterior_7417.2008This morning as I drove through the ‘hood toward the freeway, there to connect with points north and west, it crossed my mind that in the years after my son’s father and I divorced, I’ve benefited by a strange confluence of raw luck and moderately smart financial decisions. Most of these have had to do with real estate, though some are more directly tied to the economy.

After I’d had a couple of years to recover from the Parting of the Ways, I decided to buy a house — mostly by way of putting some distance between myself and the drive-by shootings near the place where I was renting. By sheer chance, the Realtor I hired, brother to a former City of Phoenix mayor, came across a house about two and a half blocks from the present Funny Farm.

Also by chance, the economy happened to be in the doldrums of the most recent savings and loan fiasco. Arizona was one of several epicenters and so was experiencing a major real estate crash, with borrowers defaulting, banking institutions collapsing, the federal government taking over property…and on and familiarly on.

My guy looked at the house in question, a single-owner property craving updates but not needing any truly major, bone-surgery-type repairs, and calculated. The owner, a widow, had died, leaving the house as part of an estate that needed curating. The place had been on the market for three months: nary a sign of moving. Meanwhile, the estate was having to pay taxes and utility bills, as time ticked on and property values continued to plummet.

He mulled this over for a day or so, after he’d shown me all the other properties on his list he thought I could (marginally) afford and watched me reject them one after another, then took me back there for comparison. I said welllll… it was better than any of the other dumps we’d looked at.

Forthwith he made an offer to the seller: 30 grand under the sale price.

Forth-forthwith, the seller grabbed it, and I was the happy owner of an aging tract house on the fringe of North Central that needed a new kitchen, new flooring, and new landscaping. Most of the stuff, SDXB (who moved in with me) and I could live with. Soon I had new countertops installed; eventually I had the floors tiled and the front and back yards xeriscaped.

Incredible luck.

The house turned out to be sturdily built; the neighborhood mostly pretty good except for a questionable area across Conduit of Blight Boulevard, the main drag to the west.

Day came when I was cruising up a freeway with the brain in idle. Through that twilight state, a thought dawned: when the alimony ran out, as it would soon, the mortgage on that house would consume slightly more than half of an entire month of my pay, which was more than I’d ever earned in my life and slightly more than the county’s median family income. By then I’d concluded it was time to eject SDXB. Without his contribution to the mortgage in the form of “rent,” I would not have enough to eat on after I’d paid the lender.

So, over my financial advisor’s strenuous objections, I combined a small inheritance with a chunk of my savings and paid off the $80,000 mortgage in full, getting rid of an 8.5% interest rate.

Surprisingly smart move.

The house was paid for. That allowed me to throw out the boyfriend and replace him with a German shepherd. And I lived there happily for quite a while, if not ever after.

A paid-off roof and a reasonably frugal lifestyle allowed me to stash substantial amounts of cash into savings. This worked out well.

Eventually I grew restless. Two houses across the street acquired problem owners: A single woman bought the place across the street from me. Her son had inherited his father’s vicious personality, and while he left the neighbors alone, he was seen beating up a girlfriend and terrorizing his grandparents. Then the people next door to them sold and that house was acquired by a single batshit man with two teenaged sons. He also was radically abusive, given to throwing furniture through the front windows. When he got into a fistfight in the driveway, screaming obscenities to the moon, that was when I decided it was time to move out.

Started looking around the city. The late, great Real Estate Bubble was just starting to inflate. With demand at astronomical heights, finding a comparable place that I could cover in cash was a challenge.

SDXB, who by then lived just up the road, happened to know a couple in the ‘hood who had just put their house on the market — two houses down the street from his.

It was still the same neighborhood about whose stability I felt profoundly ambiguous. But it was a half-mile from where I’d been living and well south of the war zone at the intersection of Conduit of Blight and Slum Borderline E/W. Although I would surely have liked to move further east, a mile or two away from Conduit of Blight, the price was right: I knew I could sell my house for what I would pay for this one. Plus the owners had cherried it out with all new kitchen cabinetry, nice bathroom fixtures, a pretty new covered deck with new sliding doors opening onto it, and a (supposedly functional) new watering system. And it had a pool, which I coveted.

Although the watering system was a joke and much of Former Owner’s DYI renovation was out of code, the place turned out to be a good buy. Real estate values continued to run amok, and within a few months the house was valued at $150,000 more than I’d paid for it.

Raw luck!

During the Great Recession, the value dropped to less than I’d paid for it, but since I wasn’t paying a loan and so wasn’t paying interest on a make-believe value, it didn’t matter: you don’t realize a loss until you sell. Today the house is now once again valued at about $125,000 more than I paid for it.

Luck.

As I drove toward Conduit of Blight this morning, I noted how much better the houses look. The place has gentrified mightily as the Lightrail Boondoggle has neared completion. Young urban types want to live near a lightrail. Not that any of them would commute on it: it’s just the politically correct, environmentally correct principle of the thing, I guess.

A whole raft of young marrieds has discovered the ‘hood — the only remaining middle-class neighborhood in North Central with even marginally affordable prices — and they’re gentrifying like mad.

Luck.

O.K. I’m glad I decided to stay in the neighborhood.

But soooo glad I moved a little further from Conduit of Blight. The tenements along that road are definitively NOT improved by the city’s shiny new train project. The train brings more noise and more characters you’d just as soon not have know about your neighborhood, more impossible traffic lights and more crazy-making traffic. So I’m happy to be mostly out of earshot from that thing and enough of a hike to discourage most of the drug dealers, prostitutes, and flakes it brings to us. And very, very happy for the young people who think the presence of a commuter train makes these houses worth buying and fixing up. 🙂

Very smart. I guess.

This afternoon a cop helicopter began to buzz the corner where my old house resides. It practically grazed the roofs, and the cops were hollering through a loudspeakers for people to get inside and stay out of the way. This went on for an hour or 90 minutes.

It’s not an uncommon occurrence. When I lived in that house, I could set my clocks every Friday and Saturday night by the 11 p.m. fly-over. The cops would park over my house right about 11 o’clock, almost every Friday and every Saturday evening. It was mildly annoying, because of course it would keep me awake. But with a German shepherd habitually described by my son as “batshit” parked at the foot of the bed, I figured WGAS? And honi soit (or legless soit) qui has the nerve to mal y pense.

And of course, it was in my present house that the Great Garage Invasion Episode occurred. So being a half-mile or more from the war zone does not necessarily make one any safer.

Raw Luck? Or Smarts?

It’s kind of a toss-up, I guess. Given a show-down, I’d say Raw Luck has beat out Smarts here. Nothing that happened, except maybe paying off the mortgage, was especially calculated. Everything that has been good probably has been a matter of chance or of being in the right place at the right time.

Isn’t that just like life?

Image: By KINKISHARYO – Phoenix_Exterior_7417, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=31119699

Downsizing: Is It Worth the Cost?

by

Recently Money Beagle ran a guest post whose author suggested that moving to smaller digs may not be the best choice for all of us as we fade into our dotage. It touches on a thought I’ve been ruminating on: the question of whether I should downsize now, while a) I can afford the costs and b) I still have the health and physical strength to engineer moving to another house. Actually, the question is whether downsizing is a good idea at all.

My house has four bedrooms. It sits on a large lot, almost a quarter of an acre. It has a large pool and a forest of trees. How much does one little old lady need to air-condition, heat, clean, water, trim, and maintain? Wouldn’t it be cheaper to move to, say, an apartment in Scottsdale? Or one of those trendy lofts downtown? Or a nice single-story patio home with no yard to take care of?

Or maybe at my age, with about 15 years of tolerable life remaining — at the outside — maybe it’s time to move into a life-care community?

Well. I wonder. Let’s consider the costs.

First, to sell this house:

6% off the top to the Realtor (the better ones in these parts get 8%): $16,500, on my $275,000 shack
Recording fees: $150
Escrow fees & title insurance: $2,500
Prorated tax: up to $2,500
Termite inspection: $300
Home inspection: $300

That doesn’t include a home warranty for the buyer or any blandishments you offer, such as a flooring allowance or a home warranty. Nor does it count the costs of repairs and upgrades at the new digs — how many of us have had to replace a water heater or a garage door within six months of a move? And do you really want to live with that harvest gold Formica countertop for the rest of your life?

If you’re at the age where downsizing makes sense, you’re past the time of life when you can pack up all your possessions and bribe your friends with beer to help you stuff your furniture and boxes into a U-Haul and then drag the stuff into a new house. That means you’ll need to hire a professional moving company, an expensive transaction: $2,000 for a local move; cross-country, $8,000. You could, of course, hire an estate sale company to yard-sale all your earthly possessions and then buy new furniture when you get to wherever you’re going: it costs about $10,000 to furnish an entire house. Probably less if you buy Ikea junque, but again: at “downsizing” age, who wants to live with Ikea’s kid-engineered throw-away gear?

Let’s see what we have here… Total cost of selling and moving: $22,250 (a conservative estimate). That’s 9% of the property’s likely sale value.

My house is paid for. To avoid a mortgage, I’d have to use the net on the house sale to buy the new place. But that place will have to cost about $25,000 less than I can get for this one. Let’s imagine that for $250,000 I could find something I’d want to live in, located in a safe, middle-class area that is NOT a retirement tract like Sun City. I’ve but begun to pay…

Buyer’s closing costs and moving cost for a house purchased in cash go like this:

Close of escrow: $250
Title insurance: $1350
House inspection fees: $200 to $400
Recording fees for deed: $50
Title company closing fee: $400
Property transfer tax: up to $1,000
Attorney fee: $500
HOA transfer fee: $300 to $400 (n/a in my part of town, thank goodness)
Moving fee: $2,000

Total cost of buying the smaller house: $3,550.

Most places I’d want to live in cost upwards of $300,000 these days. That would require me to take out a mortgage. So to the ~$3550 in buyer’s closing costs, we can add the exorbitant cost of taking out a mortgage. To get into a $300,000 patio home I’d have to come up with at least $50,000, assuming I put down everything I net from my home’s sale. It’s unlikely that I could get a mortgage for a sum that small, but let’s pretend…

Lender discount points, about 1%: $500
Loan application fee: $500
Credit report fee: $85
Loan processing fee: $75 to $400
Document preparation fee: $50 to $250
Property appraisal: $400
Prepaid loan interest: Heaven only knows!
Insurance escrow: about $150
Tax escrow: about $1500

I’m not including flood insurance or a flood certification fee because you couldn’t pay me to buy in a flood zone. So the upfront cost of taking out a small mortgage would come to $3,785 — and that doesn’t count the cost of 15 to 30 years of interest payments. So… Cost of buying a smaller house in a more desirable part of the Valley, with loan: $3,550 + $3,785 = $7,335.

Cost of selling present home + moving van and workmen + buying a lesser house in cash: $27,800 – 28,150.
Cost of selling present home + moving van and workmen + buying a smaller house in a safer part of town: $35135 – 35,485.

Y’know… You could pay for a lot of lawn service and cleaning-lady visits for $35,485.

So let’s say you hire a cleaning lady because you’re feeling too frail to scrub, scour, vacuum, mop, and dust — I believe La Maya pays her housecleaner about $80 to $100 per visit (though her house is a thousand square feet bigger than mine). Xeric landscaping costs just $85 or $100 for monthly clean-up & grooming. Cleaning lady comes in a couple of times a month; that makes her cost $160 to $200. So routine maintenance of the existing manse would come to $300/month. The $35,485 it would cost you to downsize from a midsize tract house into a cottage would cover 118 months of routine house and yard maintenance, during which you would never have to raise a finger to clean or do yardwork. That’s almost ten years!

From one point of view, then, it would take around ten years to recover the cost of downsizing from a four-bedroom house on a quarter-acre lot with no neighbors sitting on top of me to a two- or three-bedroom apartment or townhouse in a rabbit warren, complete with HOA fees and politics.

Because I’m in the Salt River Project, my utility bills are low. Because I live in an old neighborhood, I have no HOA fees. Probably on average my total utility bills for electric, water, and gas run about $425 a month — less than that, really, because winter power and water bills are very low and in the summer, the cost of natural gas is nil. In a “better” neighborhood, I’d be in the Arizona Public Service district, where power bills are much higher. And many parts of Scottsdale and North Phoenix have no gas service, so the stove, water heater, and central heating run on expensive electricity. Utility bills in a smaller house could  easily exceed what I’m paying here.

The pool costs about $40/month to run and maintain (exclusive of repairs). The yard guy: $85/month.

In a patio home, yard and pool maintenance costs would disappear, only to be replaced by a monthly HOA fee. From what I’ve seen at places I’ve looked at, $125 a month is not an unusual HOA charge.  At Pebble Creek, for example, the HOA fee is $250 a month. For an apartment…uh, condo…about $100 to $125 is probably average. So costs to live in the smaller place would probably be about the same as I pay here. The only real advantage would be fewer rooms to clean and less outdoor space to have to maintain.

So, if there’s no advantage in utility and maintenance savings, why spend $28,000 to $35,500 to move?

• It would be worth it if your neighborhood were deteriorating.

The opposite is happening here: this neighborhood, like the entire central city, is gentrifying apace. My neighbor sold her house — only 340 square feet larger than mine, on the same size lot — for $285,000. It hadn’t had a serious upgrade since it was built in 1971. The kids who bought it have spent months in renovation.

And, we might add, every other young couple and every other fix-and-flipper flocking to the ‘hood have done the same.  If the slumlords to the west of Conduit of Blight get some help from the government, they could make a handy profit by condo-izing the deteriorating apartments that now front on the urbanite-friendly lightrail line, thereby getting rid of a major source of crime and rescuing the school that was overwhelmed and ruined when the city allowed the people warrens to go in. It’ll take some time before any such thing happens…but if it does, the property value increases we’re seeing now will look modest by comparison.

• It would be worth it if you wanted a zero-maintenance place where you can lock the door and take off for weeks and even months.

In Arizona, many ordinary houses meet that description. An intelligently designed xeriscape can look very nice and need almost no regular maintenance.

• It would be worth it if you lived in a place with a harsh climate.

Arizona’s summers are pretty fierce. On the other hand, for $40 a month plus occasional repairs, the pool makes the summer heat tolerable. Electric bills to power air-conditioning run about $230 a month, hardly enough to break you up in business. And again: at $40 + $230, the $35,485 would pay those bills for 10 years. How much are winter bills where it snows? Or where it’s foggy and chilly year-round?

• It would be worth it if your kids moved out of town and you wanted to live near them.

Maybe. Following the adult kids to some new locale can be a recipe for depression. Your grown children may not feel very invested in spending large amounts of time with you — except insofar as needed to obtain free babysitting services. Meanwhile, you’ve left behind friends who want to hang out with you, to say nothing of your favorite shopping, your church, your clubs, your cultural life, your beloved doctor, your competent dentist, the only hair stylist on the planet who can cut your hair the way you like it…

Overall, then, if your present home is in good repair and in a reasonably safe neighborhood with nearby shopping and lifestyle infrastructure, downsizing to a smaller place could represent not a savings in maintenance but a net loss, one that could extend over quite a few years…possibly to the end of your lifetime.

So: think twice before jumping into the downsizing pond.

Gentrification on Steroids?

by
blindingwhitehouse
New build in Richistan

Just got back from circumnavigating the ‘hood on the bike. The weather is gorgeous, and this is the first time I’ve felt like getting out of the house and riding a bicycle. Either I’ve been hiding in a hole for a very long time, or the area around the Funny Farm is gentrifying at something just under Mach 10. It’s hard to believe the difference: North Central really has become the new Encanto District.

Just a year or two ago, about every third or fourth house in our corner of North Central’s affordable sections was looking a bit tired. The sections where the richerati live were always reasonably well cared for, but the houses are old and they also looked a bit out of date.

Well. No more!

Over in Richistan, big expensive old ranch houses on half-acre+ lots have been renovated and painted, their landscaping spruced up, and they are to die for! Almost every house has been upgraded and spiffed up. The whole area over there, up and down roads I haven’t explored in a couple of years, looks absolutely great.

Then over here in the poor folks’ ghetto, hardly anybody’s house is badly run-down. Maybe one or two need some major work. Quite a few houses have been fixed and flipped. Or just fixed up. Most houses (except my neighbor’s, wouldn’tcha know it) are freshly painted, the landscaping looks good, the roofs are new (thanks to the  hailstorm not so long ago). Lawns are green and mowed. Desert landscaping mostly looks up to date and tidy. Dead and overgrown plants have been cleared away. What can one say?

The neighborhood to the north of us used to be seriously run down — not a very good neighborhood at all. There was a drive-by shooting up there some time back; the city let a facility for delinquent boys go into one house, causing all the neighbors to give up on maintaining their homes or to sell to people who didn’t give a damn; the Fry’s grocery store behind the tract was, to put it nicely, not a good neighbor.

But that area now looks much, MUCH better. Dead landscaping has been revived. Homes have been repaired and painted. Some of those old Levittown-style houses are actually very cute, with new coats of paint and upgraded elevations. Some people have gone so far as to install fancy new facing — stone and brick — on the old tract boxes, to surprisingly good effect. And on the feeder street that buffers our part of the hood from that part to the north, people have run freaking amok fixing up places. As in tear everything out and rebuild the interior from the slab to the roof. Amazing.

Of course, this means our property values are going through the roof. That’s good in a sense: maybe I can get myself to Scottsdale if our prices catch up to similar construction in more upscale parts of the Valley. And bad in a sense: should I prefer to stay here (inertia precludes moving…), my taxes soon will be unaffordable. Oh well.

At this point, the only seedy part of the immediate ‘hood is the section right around where I used to live, about two blocks to the north and two to the west. Everything else on that street has been fixed up, but my old house is still a wreck. And it seems to depress the properties near it. Either that or it’s so bad it makes everything within two or three lots look sad.

The woman who bought the house from me on the Bubble’s uptick, a former GDU colleague who quit a tenure-track job to run off to California with a lover, never did get another job after she moved back here. She never seriously tried. What she did was borrow money against the house’s ballooning value and live on that.

Consider: I bought that house for $100,000, back in the day. It was, I believe, around 1994. I sold it in 2004 for about $210,000. She ultimately borrowed over $400,000 against the house, so we’re told. Of course, she paid virtually nothing on those loans. And she let the house run down slowly.

Finally she was evicted. The bank couldn’t resell the house. It went to pot. (So did the bank…) A number of shady renters lived there and it continued to rot away. At one point the house was on the market for an astonishing $60,000! That was when even low-end houses in this area were selling for something over a hundred grand.

The people who bought at that price were, shall we say, a “cultural problem.” They showed no interest in renovating. They evidently wanted to live in it, but they didn’t have the money to fix it up, or else they didn’t have the cultural wherewithal to do so. It soon became a shambles.

It looks a little better, but it’s still pretty much trashed.

Which is a shame: I really did a lot of work on that house. When I sold it to my distant friend, it was cherried out pretty nicely, with expensive tiling and appliances and a yard like a city park.

No more.

It’s funny how one blighted property will depress the properties around it. And it’s sad to think the blighted property was once my house.

Fortunately, though, it’s not now. 😉

My part of the ‘hood is in pretty good shape, with just a couple of exceptions. One owner is deliberately letting two historic old trees in the front yard die. And my neighbor hasn’t been able to paint the woodwork she replaced in the eaves and dormers…so that looks pretty tacky. But other than needing a coat of paint, her place looks passable.

My house will soon need a coat of paint, too. In fact, I should call Bila the Bosnian Painter and see a) if he’s still in the bidness and b) if he’ll do the job for a reasonable price. I’ve always liked Bila. He’s a good man and an interesting one. And he does decent work without wasting time.

At any rate, it’s kind of startling to see that much change in what seems like not very much time. I guess when the boob thing started I crawled into a hole and pulled it in behind me. Either that or we’re looking at gentrification on steroids.