That's one way to deal with the crazy housing market

"AestheticsInMotion" (aestheticsinmotion)
09/07/2018 at 15:02 • Filed to: None

Spotted near home

DISCUSSION (52)

Tristan > AestheticsInMotion
09/07/2018 at 15:25

My dad has a 1957ish one and a half ton Studebaker Transtar dually cab chassis sitting in the weeds at his farm. I want to do this with it so bad!!!

fintail > AestheticsInMotion
09/07/2018 at 15:28

Probably better built than a lot of local housing, too.

Regarding the insane market, I see there’s been some very minor softening in at least some areas lately. Still far beyond the means of most normal working people (if they want a reasonable commute) , but better than nothing.

AestheticsInMotion > fintail
09/07/2018 at 15:32

Haha yes that very thought crossed my mind. And yes I've noticed that too! Fingers crossed it keeps trending downward. Or... Uh. Trending upwards at a slower pace?

Michael > AestheticsInMotion
09/07/2018 at 15:41

Keep it away from 11foot8

fintail > AestheticsInMotion
09/07/2018 at 15:48

Both, depending on area. I think appreciation has already slowed, and some areas will see slight depreciation. I notice Zillow claims minor (~1% ish) depreciation in some areas lately.

Ash78, voting early and often > AestheticsInMotion
09/07/2018 at 15:50

Dodge van/tiny house $7,500 — I know what I have, price firm, no flippers or speculators. This thing can easily double in value as soon as you drive it to downtown Seattle. I just haven’t had the time . My loss, your gain.

Cash Rewards > AestheticsInMotion
09/07/2018 at 15:55

Got a friend who’s a marine who just moved into a van. Got a promaster, built in a bed, laminate flooring, getting a solar panel for the roof. Why pay r ent or morgage while he’s deployed?

Eric @ opposite-lock.com > AestheticsInMotion
09/07/2018 at 15:58

My area has gone pretty much stable at this point. No declines, but appreciation went almost completely flat in the spring and a couple sales failed (the most notable was a couple neighbors everyone desperately wanted to get rid of) . I was hoping to see ~$ 100k appreciation this year, but we’re only up around ~$70k from last October after the gains petered out earlier this year. Although ours is worth more than most in our neighborhood, it’s still not worth quite enough more...

Eric @ opposite-lock.com > AestheticsInMotion
09/07/2018 at 16:04

I thought motorhome living had been a thing for a while in this area... This one is pretty impressively home-like, though. Hell, Seattle had a similar thing long before this back when the houseboats on Lake Union were a dirt cheap way to live in the area (those houseboats are all millions of dollars now).

That intersection is near where our baby is going to be delivered, we were just there two days ago eating dinner before our birthing class...

NKato > fintail
09/07/2018 at 16:04

As far as I'm concerned, I need a depreciation equivalent to the Detroit crash to justify buying property in this region. Mortgages, property taxes, everything.

AestheticsInMotion > Eric @ opposite-lock.com
09/07/2018 at 16:18

Evergreen? Houseboats are such a strange concept. Is that a local thing or are they national? Did a window job for one years ago and oh man... Worth it for the story, but I'd never do it again. Had to take a rowboat around 3 sides and use a 24ft pole.

AestheticsInMotion > Cash Rewards
09/07/2018 at 16:20

I wouldn’t mind trying this. Buy a big van, outfit it, get a motorcycle/scooter to commute with... My hangups would be laundry, cooking and refrigeration. I know the last two could be figured out, but I haven't seen any laundry solutions and if I have to go to a laundry mat it wouldn't be worth it to me

AestheticsInMotion > Tristan
09/07/2018 at 16:20

Bonus points for using 50's style construction and design

Dr. Zoidberg - RIP Oppo > fintail
09/07/2018 at 16:25

Big softening up here.

Homes were going for 20-40% more than asking price up here January though May, bidding wars on any and all properties, low inventory.

That came to a screeching halt in July. Prices were getting too high, coupled with rising interest rates, a lot more sales seemed to be falling through once pending. That led to higher inventory, which only further deters bidding wars, and I'm seeing lots of price cuts . We managed to sell our home at the perfect time... No way I could sell it for what I got if I listed it today.

Cash Rewards > AestheticsInMotion
09/07/2018 at 16:26

Yeah, solar power and battery storage will power an induction cook plate and a fridge. Laundry I got no clue. When I lived in New Orleans there was a laundromat/bar/pool hall. I don't know where they're all not like that

AestheticsInMotion > Cash Rewards
09/07/2018 at 16:29

That is genius.

HFV has no HFV. But somehow has 2 motorcycles > AestheticsInMotion
09/07/2018 at 16:36

“ Spotted near home”

well yeah the home is right across the intersection

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/07/2018 at 16:36

I already have mythical equit y because we bought this for less than the estimate and appraisal. I'm expecting a full dip next fall. That will impact my income far more than the my equity. DUN DUN DUNNNN

Eric @ opposite-lock.com > AestheticsInMotion
09/07/2018 at 17:00

Yes. It’s where my wife was born, too. Kind of hospitalception or something. Where I was born is long gone and nowhere near here...

It’s mostly a Seattle thing; few other places had the right juxtaposition of available water, settlers, frontier conditions, and a need for shanty housing for itinerant workers. There aren’t many places that ever allowed them to permanently dock like they do here and certainly not to the same extent. The only other areas I am aware of on the west coast that come anywhere near the style/extent are attached to Sausalito, CA and an island north of Portland in the Columbia River, but they’re still small and very limited in size compared to the Seattle area ones. There are also some in BC on the Fraser River, but they’re very limited, as well as a small one in an area they call “Fisherman’s Wharf” in Victoria that are all used commercially today. Elsewhere, they’re usually on inland lakes or rivers... It is/ was such a unique thing about Seattle that floating homes were a central element highlighted in the most famous movie set in the city.

fintail > NKato
09/07/2018 at 17:09

Property tax rates don’t seem too bad - I know people in TX who pay as as much there as they would here, for a house worth less than half as much. Of course, they also have a much smaller mortgage.

WA fails on other taxes, which are regressive even by American standards.

I have no legitimate plans to buy any actual property anywhere near I work, the value (and ability to pay) isn’t there.

fintail > Dr. Zoidberg - RIP Oppo
09/07/2018 at 17:12

I’ve heard the same, bidding wars are virtually gone now. Breaks my heart.

You really made the most of your equity windfall, of course, you had to then buy in to an overheated market, but if you are going to be there long term, it’s not an issue.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/07/2018 at 17:13

We started with ~$10k in mythical equity, too, in spite of our sale actually pulling the average down. For some reason our house sat nearly a month last fall, unlike everything else that sold instantly while suffered bidding wars. We got ours for below asking when another across the street went for well above asking only a month before. The ones shortly after sold for $35k-50k above asking... It changed this spring when a house went up for $120k more than we paid for ours and sat for months with little interest. Took them 3 months to sell, although it went for right around what ours is estimated to be worth.

I just want to get our financial situation sorted before the collapse locks in, which will probably be set off by a bigger interest hike or recession, which is probably right around the corner considering we just set a record for “expansion” length recently.

Dr. Zoidberg - RIP Oppo > fintail
09/07/2018 at 17:15

It’s not an issue indeed, plus when the market gets bad again I’d rather be stuck here then stuck where I was.

Eric @ opposite-lock.com > NKato
09/07/2018 at 17:17

Property tax really doesn’t go down. I got a pretty big hit earlier this year and they only ever seem to go up. The bigger the budget people approve, the more they charge us and spread it across all the properties.

The thing is that you pay that no matter where or how you live. It’s either direct as a homeowner or indirect with a little on top as a renter, unless you’re completely mobile like the picture above, then you pay whatever the tax is on the vehicle wherever it is registered.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/07/2018 at 17:27

It feels like it's definitely close. Collapse is a harsh word, but the party will soon be over regardless.

NKato > fintail
09/07/2018 at 17:32

I’m more or less wanting to buy a plot of land and build somewhere. The problem is that Washington has some stupid costs baked into new construction that’s causing the housing problems in the first place. No affordable starter homes.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/07/2018 at 17:38

I believe the Chinese economy is starting to decline (thank Trump), which is working together with their capital controls to reduce the money flooding out into real estate in the US and Canada. It also coincides with our expansion is getting old, the Fed increasing rates, and prices finally bumping clean out of the range where new players can get in locally. Perfect storm. I wish I could have waited it out a handful more years before we bought, but we both wanted some level of stability before having a baby.

The question is what this crisis will look like, as there are a lot of possible scenarios that are hard to predict.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/07/2018 at 17:43

When the smoke clears and interest rates plummet because they want to incentivize buying again, I'll swoop in, pay down the balance, and refinance. I can make it a win in any scenario as long as I'm prepared for the worst... At least that's how I pump myself up about it

415s30 W123TSXWaggoIIIIIIo ( •_•))°) > AestheticsInMotion
09/07/2018 at 18:04

Don’t think I haven't thought about converting a big double decker bus with my contractor cousin!

415s30 W123TSXWaggoIIIIIIo ( •_•))°) > AestheticsInMotion
09/07/2018 at 18:05

Well in Japan they have small all in one washer dryers.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/07/2018 at 18:06

Sadly, I came in somewhere around the bottom of interest rates, so there’s probably nowhere for me to go. I’d be shocked if I could somehow get a rate like the lows we saw in the last crisis, especially on a home that could drop 40% in “value”. After a handful of years, it’d need to be that much lower to justify paying the first years of amortization again, let alone the fees to set up another loan...

Companies that pitch refinancing to lower your payment prey on those with a poor understanding of math.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/07/2018 at 18:17

I did some preliminary calculations last month and without a rock bottom interest rate, it can’t really work for me . If I paid down my balance by , say 30% (!!!) with a refinance — even if my interest rate was lowered by ~.85 percent less , my mortgage payment would go down maybe 30%... But that excludes property taxes and insurance of course. In addition, I would be out that massive amount of cash I used to refinance, plus the cost to refinance. It would take ~20 years to regain that cash from the savings on the new mortgage payment. Hardly seems worth it.

Unless I got some big inheritance or saved up enough to basically pay off the home, seems like I’ll just stick with what I got until (and thats “if”) the right opportunity arises.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/07/2018 at 19:02

That’s how it always comes out. Once you pass something like 3-5 years into a loan, unless it’s a ridiculously shitty loan that you never should have signed on to begin with, you’re not doing anything good for yourself by refinancing unless your situation is so sketchy that losing that much money to reduce your payment to keep your house is worth it to you. I’m pretty much locked in aside from making principal payments to reduce my interest.

Check out this calculator that I found, it is a real eye-opener (it does the same thing I’ve done in spreadsheets). You should be feeding every bit of excess money you have to work with that you would be eventually using during a refinance into your principal because it cuts a ridiculous amount of interest from your loan and reduces the length considerably, especially when made near the beginning ...

https://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx

AestheticsInMotion > 415s30 W123TSXWaggoIIIIIIo ( •_•))°)
09/07/2018 at 19:05

I’ve seen those here. Small capacity, huge upfront cost, subpar r eliability a nd very slow cleaning cycle. But... Might still be the best choice

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/07/2018 at 19:31

Oh my good golly gosh darn Lord: it says if I threw an extra $10,000 at it annually, the duration of my amortization would be cut in half

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/07/2018 at 19:51

Unsurprisingly, if you put it in on a monthly basis, it reduces the cost and time even more, but you have to be able to let that much go consistently... It really adds up. $833.33 a month instead of $10,000 annually will be even more effective.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/07/2018 at 19:55

The problem is that while somehow I can imagine myself scraping up an extra 10k over time, an 833.33 per month — every month — seems quite daunting.

BaconSandwich is tasty. > AestheticsInMotion
09/07/2018 at 20:47

I’ve thought the same thing about my grandpa’s old 1943 GMC grain truck. It’d likely need a new engine and new rims (split rims - scary as heck), but I think it has potential.

Tristan > AestheticsInMotion
09/07/2018 at 21:19

Mid century modern tiny house RV on a Studebaker chassis? I think yes!

fintail > NKato
09/07/2018 at 21:26

I think in the Puget Sound area, it is more than that. Dumb zoning, huge income disparities , significant population growth, terrible traffic, and tolerance of speculative offshore buyers have all combined for a perfect storm. There are plenty of affordable starter homes in WA, just nowhere you (or I) want to live. What are those costs, and what do they add?

Unfortunately, lower cost areas of the country often also have a lower quality of life.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/07/2018 at 21:46

Regardless, doing either will help.

Sometimes I feel like I should put together a series on applied math and general skills for adulting. Not that you need it, but I know plenty of people that simply don’t understand these things.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/07/2018 at 21:57

No one would read it anyways. We have friends that could have a lot, but finance Jeep Wrangers with near nothing down and take expensive vacations, then wonder why they can’t get approved for a home loan.

Someone was not too pleased because my wife recommended our loan guy, who then totally ghosted them. Not too professional for sure, that does disappoint me. But when I found out more about their financial situation -- and the fact that their last loan guy dropped them while they had a property under contract because the underwriter didn’t approve -- I was like, “Well... There you go.”

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/07/2018 at 22:06

It always baffles me how people get through life making so many bad decisions and being exploited by more sophisticated people at every turn because they don’t understand what is going on.

I can’t even imagine people like that buying a car, let alone a house. It blows my mind.

415s30 W123TSXWaggoIIIIIIo ( •_•))°) > AestheticsInMotion
09/07/2018 at 22:59

Well, if you got one made by National (Panasonic) from Japan, I suspect it would be good, crap doesn’t survive there, people expect quality and the good companies generally deliver it. They may not be very quick machines but you are probably right that they may be the only way to do the job with space limitations, I have no idea if they have these things for boats.

NKato > fintail
09/08/2018 at 01:59

I agree. Also, I find it strange that for a state that wants to mimic some European standards, that they do nothing to regulate foreign investment in real estate property. It’s a major problem that needs to be addressed -- but the politicians are deaf to this idea that regulating or eliminating foreign money in home real estate would be part of the solution.

fintail > NKato
09/08/2018 at 13:30

Follow the money. Residency is for sale, and some value the addition of capital no matter the origin or source. No matter the regime in DC, this is allowed (although maybe more boldly now with son of a conman son in law of a conman Jared actually traveling to pitch pay-for-play residency) , and now the Seattle area mimics Vancouver in many zipcodes - the Vancouver real estate market is a haven for money laundering and the hiding of illicit funds, and is a real disaster for normal working people born after 1970. Local politicos will see it as additional property tax revenue, and their thoughts stop there. There’s something treacherous about it.

As someone who has spent time in Germany and Switzerland, if WA wants to mimic Europe, it does a very poor job. But doing so would require more progressive taxation along with social goods, something Americans historically fear.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/09/2018 at 16:49

Hang on there, financial guru man.

What about early-payoff penalties?

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/10/2018 at 00:00

... did they saddle your loan with one of those? The only time I’ve seen one personally was with my parents, but I’ve heard of them.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/10/2018 at 00:20

Further:

They are usually for a fixed period of time, often under 5 years, because most people sell their house 5-7 years after buying it. In this case, it depends on what it would amount to in interest rates (Remember those written puzzles in math class? You need to read it and build the equation.). If it only kicks in if it’s entirely paid off in a time smaller than you would ever pay it off, you’re golden. If it does for any/all prepayment, you have to calculate whether it’s better to pay the penalty or the interest (again, look at the calculator and compare how much you’re saving in interest to how much you’re paying in penalties). If you don’t come out ahead, keep the money somewhere it’ll produce returns (anything from a basic money market account through a brokerage account) then pay it down when the penalty period has expired.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/10/2018 at 00:25

I just did a conventional loan, I can tell you I didn't read all 200 pages I signed...

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
09/10/2018 at 01:23

Did you end up with a penalty in there?

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
09/10/2018 at 01:25

No idea!