April 15, 2007

Exile in My Own House

The Wife is having her girls over for a stamping party. This is where they convene around a table and make greeting cards using a variety of stamps and other craft techniques.

After helping out with the cleaning, I prepared food for them -- from-scratch mac-and-cheese, crudites with mint ranch sauce, and melon balls. I made up a honey butter for The Wife's banana bread, too. Now that this is all accomplished, my job is to get out of the way and let the girls have their fun. I may come down to grab some food in a bit, but aside from that, it's up in the loft with the cats, so I can let the girls have their fun.

All part of being a good husband.

I feel bad after our near-miss on buying a house earlier this week. We found a nice house during one of our open house shopping expeditions, one in which the owners had put in a lot of extras -- granite countertops in the kitchen, custom millwork everywhere, and laminate floors in practically the entire house. We thought they were a bit over the market in this neighborhood at $373,000, but loved the house. So when the owner called me up and said that his realtor suggested they come down in price, and had cut the price to $267,000, we jumped at the chance to buy it.* I pulled the public recordings, saw their mortgage situation, and figured that the drop in price was because the house had been on the market for seven months and the sellers were beginning to feel distressed, so the big drop sounded like it was within the realm of possibility. So I spent a day lining up the financing. But later, the owner and I spoke again and he apologized for misspeaking; he had cut his price to $367,000, not $267,000. $367,000 will probably not be within our grasp for several months yet.

Now, remember that I haven't seen the house yet that has made me swoon, but The Wife cannot make that claim. (I certainly did like the good layout, generous workspace and storage, and granite countertops in the kitchen of this house.) So she was pretty bitterly disappointed with the miscommunication and the likelihood that we will not be buying this house. I feel bad for her and I figured helping her out with her girly event would make her feel better.

Or, maybe we will, when we get in a position to put a bigger offer down on the table than we are in at the moment. The general consensus of the real estate brokers and real estate lawyers I've spoken about this with is that $367,000 is still over the market for this neighborhood and a house like this. Yes, it has a lot of extras one would not expect in a neighborhood like this, but that's the reason why the owners aren't getting the value for it that they would like; they've overbuilt the extra touches and the market won't support it. And real prices are falling faster than these owners seem to be reacting; one broker I had lunch with a few days ago said that real prices** were down 12% in the past three months.

So for the time being, I'm exiled to the loft of the Rented Mansion In The Desert, and that's okay; I'll manage for a few hours. My class for tomorrow is already written; it's about employment law so that's one I will be able to teach with enthusiasm and little preparation since it's my second-favorite subject (after Constitutional law) to cover. I'll just take it easy. If I decide I want to watch a hockey game on TV or something I can always drive out to the sports bar a few miles away, but I'm not motivated enough to do that just yet.

*(I know those prices seem out of sight to people in Tennessee. I assure you, housing in the Antelope Valley is the only place in Los Angeles County that is even remotely affordable like that.)

** "Real prices" are distinguished from face-value prices in that most of the price depression is showing up in after-transaction values to the buyer, in the form of financial incentives like interest rate deductions or principal rebates, or premiums like free swimming pools, free granite countertops, or free cars.


Salsola said...

Doesn't all that stamping interfere with your concentration?

-- Spungen

Salsola said...

Sorry to hear about the house, but I'm sure Mr. Spungen has shared the good news he heard from a reliable source re the local real estate market (from a buyers' perspective)? That price may not be unrealistic within a few months.

-- Spungen

Burt Likko said...

Indeed, and our financing options should be even more flexible at that time. Timing the market is risky but right now, the planets and stars seem to be moving into position for us.