the housing market and the depression

I'm pretty bummed out right now. Our house has been on the market for about six months, and we're seeing very little activity. We had a flurry of interest when we first listed it, and we even had an offer in the first week (although it was a crappy offer for less than what we had paid for the house). But ever since the summer ended, our prospects seems to have also headed south for the winter.

Our agent suggested that we consider owner financing it. Although I'm sure it would make the house more attractive to prospective buyers who can't get a loan, it isn't going to help us at all with building our next house. We need that equity. I also don't like the possibility of someone defaulting on their payment and trashing the house, thereby making it even more difficult to sell. So I guess we'll have to just sit on it for now.

It's either that, or we try and come up with some sort of gimmick to try and entice buyers. I have heard of people offering a new car with the sale, and I've heard of special two week sales that lower the price by 15% or more (in the hopes of saving money on future mortgage payments should the house not sell for some time), but I'm not sure that I want to sink any more money into the house, nor lose any more money than we're already guaranteed to lose by signing with an agent. We've already spent so much time and effort making the house look good. We've touched up and replaced nearly everything except for the carpet and the furnace, and we're ready to grant a carpet allowance if it would help. But you never know what people are looking for in a house. I've heard of people spending tons of cash on new flooring or appliances, only to have the new owners come in and replace it to match their furniture. Most people want to make a house "their own". But I've also heard of buyers who have asked that furniture and decor be included in a sale. We even had an offer on our last house that asked to include the homemade curtains in my son's room that my wife had sewn to match his baby bedding. So you just never know.

If we believe all of the presidential hype, I guess we should sit it out and wait until next year for when the economy is supposed to somehow turn around. But I fear that house values could go down if we wait that long, and then we'll be out our initial 20% down payment, plus all of the money we spent on upgrades and mortgage payments while it was for sale.

Selling a house is definitely one of those crystal ball moments. You wish you could look into the future to see what the eventual sale price is going to be, so that you can know whether to accept low offers right now, or hold out. It's almost like gambling. You got to know when to hold 'em.

ride it out or take the loss

Our house is for sale right now. We have a dream of building our own home, and we even own our own piece of land to do so. But we need to wait to sell this one first before we can sink any cash into new construction.

We're anxious to sell, and obviously anxious to build. So far, we've had many showings on our home but only one low-ball offer. We're thinking of lowering the price again, but that will only invite further low-ball offers, right? The house is more than we need, and most of our payment goes towards interest. Therefore it feels like we are wasting cash on it each month. But is it better to waste the cash and wait for the right offer, or is it better to lower the price now to try and attract a quick offer? It's a difficult decision to make.

The housing market is definitely in a slump, although it hasn't hit our area as hard as in other areas of the country. Admittedly, our impatience and frustration with house showings has a string influence on our decision-making, but like most situations, I suspect that it makes sense to be patient.

deliberate climate change

Back when I lived in Nebraska, I once heard a story about how some scientists decided to try and transplant a forest into the Western plains of Nebraska. They planted thousands of seedlings and watered and nourished them to try and get them to grow. The idea was that if they could make them survive, it may cause a radical climate change for the state. The experiment was a failure as it required more constant maintenance than they had the resources for.

But I was recently thinking that this is pretty similar to what is happening in areas like Denver or Phoenix, which are essentially desert climates. The only green grass you are going to see is the transplanted type that requires lots of water to make it survive the low humidity. My uncle once made a comment to me that if everyone stopped watering their lawns (as they are sometimes forced to do due to water restrictions), the area would be as brown and dried up as the desert, and I believe it.

But it doesn't stop people from moving there and propping up their vision of utopia. In Arizona luxury real estate is selling like hot cakes, and in Colorado the high-end homes don't appear to have been affected by the national slump that the rest of us are going through. Some may blame it on the West Coast transplants who come with big bucks to scoop up what is (in their collective mind) a great deal. For natives who aren't accustomed to paying $300k for a start home though, it can be quite disparaging.

A good friend of mine is in this exact predicament. He is a single father and never finished high school, but he managed to work his way up to a decent technical job. Unfortunately, because of his lack of education and other experience, he is a slave to that job and that company. He worries about getting surplused. He can get approval for a loan for a home, but there are no homes to be had for what he has been approved for. Even with the buyer's market and housing slump we are seeing for non-luxury markets, the prices have not fallen very far from the inflation tree just yet.

I'm trying to convince him to move somewhere else. Move somewhere greener and cheaper, I tell him. Somewhere that you don't have to be so concerned about getting let go and struggling to find another high-paying job. Move to a place where you can find a home for so cheap that you could work for anyone and still pay the bills. And start to develop multiple streams of income. Just like a retirement fund, why put all of your eggs into one basket? As nice and (over?) developed markets like Denver appear to be, they are still one or two sprinkler cycles short of a sandstorm, and with our nation's approach at conserving resources (like water), I'd be looking at (naturally) greener pastures instead.