Getting the house ready... wavering on whether or not to keep it and go back to square one or sell it. Irony is if I keep it I'll have the same very loan balance as when we bought the house in 1995. Almost to the dollar. I want to keep it because I like my modest little crapbox. I like my neighbors, including the ones who used to raise chickens in their backyard, and my kids have lots of friends here. Their school is close by. I also really enjoy working my patch of dirt and take pride in my lawn and gardens. But the thought of doubling my debt really scares me, even though I'd still have roughly 1/3 of the appraised value (a real appraisal, not a fake county tax assessor appraisal) as "equity." If Houston real estate prices drop 33% I'll be underwater. I hate debt, never had any debt... except for the mortgage. My Realtard says the neighborhood is coming back, and I'd have to agree. Just about all of the foreclosures have been bought and are now occupied by actual owners. They weren't purchased by out-of-town seminar fliptards.
The carpet and flooring guys were here today and I am shocked at how much of an improvement it is. It looks fantastic! The interior now looks like a brand-new house, other than the crappy counters Pulte installed in the kitchen. Pulte builds them fast and cheap, and back in the mid-1990s they had very little margin. But I can live with crappy counters. I will never take my kitchen for granite.
A damaged roof is a different matter. Bids for the roof are coming in and I finally found a reasonable quote. I trust these guys because they did the roof for the parental units a few years ago and did a great job. $5500 for 30-year shingles, installing ridge vents and enlarging the soffit vents. Other estimates ranged from $2000 (a joke) to $8500. Best of all they can start Monday.
The guy who runs the ACC also owns an air conditioning company, and when I went to him for approval he pointed out that without good soffit vents the ridge vents won't do much good. With proper ventilation the temperature in the attic should be a good 30 degrees cooler in the summer than it currently is with the old Airhawks. Unless you live in the South or the desert southwest you cannot believe how hot attics get in the summertime on the Texas Gulf coast.
I asked how well ridge vents would withstand hurricane-force winds. He says they hold up better than the Airhawks or those turbines. The wind simply passes through, while the Airhawks may be lifted up. Ditto for the turbines. I trust the advice of a guy who owns an A/C business and has no financial interest in my decision.
So my decision boils down to this: If we are about to experience Great Depression #2, I should sell now and take the money and buy gold, ammo and canned goods. In that scenario I'd be a fool to keep the house. If we are witnessing a repeat of 1980-1982 (as I suspect), my mortgage, taxes and insurance would still be cheaper than renting a decent 2-bedroom apartment, and much cheaper than renting a 3-bedroom.
My readers in California probably can't relate to this. It works both ways. I cannot fathom how ya'll can afford to live there. If I told you how much my new balance would be you'd most likely laugh (Lou's getting worked up over THAT?), but your pay scales are not all that much higher. When I hear people talking about $1800 mortgage payments for modest tract houses I literally cannot relate.
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11 comments:
I'm confused.
Why would you want to sell it?
No, I don't know the market in your area, but around here (SF Bay Area) it's not a good time to sell if you have plenty of equity. If I finally find the super sweet deal I've been looking for, I plan to rent my current place for sweet passive income.
Woohoo!
BTW McCain wanted me to bring this message to the masses:
Ther are serieis isues at steak in htis elcteion, and serieis difrences betweed hte canidates. An we well argue abot then, as we shoold.
The parental units also got a new roof and they installed ridge and soffit vents. That made a TON of difference with the heat up in the attic. It was actually freaky how much of a difference it was.
"I'm confused. Why would you want to sell it?"
Some time over the next few months I may explain why.
"It was actually freaky how much of a difference it was."
That's what I hear. My attic is currently sealed tight, even with the airhawks up there.
Lou, would you mind sharing the name of that roofing company you're thinking of using? I recently moved to Clear Lake and am trying to collect recommendations on various repair companies. Thanks!
Good to see things are moving along, Lou. Chin up!
As for moving or staying, here's my advice: A good neighbourhood and good neighbours are worth their weight in gold, so to speak. If you have that now, and you can stay in the house, then stay. Stay. STAY. (Moved house lately? I did a lot, and if you need more stress in your life, that's a good way to do it.)
33% equity in a "normally priced" house (not one in California) really is OK, and you're no worse off on that count than the average bloke. heck, you're better than anyone who's bought lately. Sure, you'll pay a bigger mortgage payment than you do now, but again, back to the neighbourhood issue -- or non-issue.
And 33% is a good buffer against a house price drop. Sure, it could happen, even in Houston if things realyl turn ti+s up, but as with owning anything long-term, you takes yer chances. I think it's a good chance of doing OK in the long run.
Ridge vents: We have 'em, and we love 'em. (Sealed-up attics are hell on your A/C cost.) I even had my mom put them on her hurricane-prone house when she re-roofed, but only after reading a fair amount about how well they handle that. Where I am up here in DC, the most we've had is maybe 60 mph but no worries at all with that.
And the attic is MUCH cooler after these were installed, at least the low air space near the insulation, and that's what counts -- but put your head up high near the vents, and it's 130+F hell! But all that really hot air is flowing out quite nicely, even on sultry, dead-still days.
NoLa, Southwestern Roofing:
www.southwesternroofing.net
They're way up in northwest Houston, though.
NoVa, thanks for the advice. That's pretty much my mindset right now. I've been here 13 years and I'd like to stay here until the kids are grown up. It's not a ritzy neighborhood but my neighbors are all solid, decent people. I feel comfortable here, it's my home.
There is one big positive for this section of Katy, I think. This side of Houston is seeing a cluster of major hospitals going in. Methodist, Memorial-Hermann, all of the majors are erecting campuses just 3 miles from my house. I doubt my tract house will see a huge increase in value, but with thousands of new hospital workers nearby it should at the very least keep prices stable.
$1800? EIGHTEEN HUNDRED???
(does spit-take)
I'd almost kill for payments that low for my small, crummy little 50's tract house in the bay area.
your blog is one of my favorites, but I guess we'll never be able to relate Lou! :-)
cheers
remodelnerd
The Bay Area is a great place, Steve. I am very fond of it. I've said it many times before, if money was no object I'd move there yesterday. Even with the nutty politicians.
$1800 is low for mortgage payments on an old tract house there? Yikes! That's far worse than I thought.
My crapshack is a cookie-cutter Pulte model, built in communities throughout the US. I was shocked to see what they were selling the very same model for in Phoenix, only without any land to speak of. I have a decent lot, with room for trees and a lawn that takes me an hour to mow. The EXACT SAME HOUSE in Phoenix with about 10 feet of space between houses in 2005 was 4x the price. I can buy the argument that the Bay Area is constrained geographically so land prices are higher, but Phoenix?
Paul writes,
I've been banging nails for four (Oh, God!) decades. Usually on Cape Cod or north of West Palm. Other than a real well installed (it's all about the care, not the materials) wood shingle, or metal roof, an 'Architect' type asphalt is the way to go for hurricanes. They flex, yet are strong enough not to rip off at the nail seam.
Get your attic over insulated. I've noticed most southern homes are under insulated. Heck, put a foot, or more up there.
I go down south and often touch peoples south or western walls. In the afternoon into evenings, solar energy just turns those walls into radiant energy heating elements. They are usually just stucco, block, 3/4 lath space with 3/4 inch of blown on and then the sheetrock. People, please put some shade trees up on those sides, or apply an inch of foam insulation, outside or in, and re-rock or stucco.
Ditto the inside ceilings. The walls and ceilings all radiating heat, and the AC unit trying to knock it down. Another bad ceiling thing is recessed lighting. Heat just pours down from the attic from those things.
Make sure your gutter vents are clear. Often the attic insulating guys blow/stuff them right up, and you are back to zero.
Sounds like you have a good spot. I would stand pat. Who knows whom you could get as a neighbor. Only one, or a one-idiot male juvenile down the street, can sour things.
Get your attic over insulated. I've noticed most southern homes are under insulated. Heck, put a foot, or more up there.
Check. I paid more (I think it was about $300 at the time) to have Pulte blow in an extra layer. The roofer is going to install extra soffit vents and clear away the insulation that in some sections was blown over and covers them. It's pretty darn thick up there.
I was young and stupid when I bought this house in 1995. That's my only excuse. I didn't know what to look for. Builders love people like me.
The house is brick and Hardie Plank, so siding is never an issue. The heat that radiates off the western side of the house is amazing. I can go out there at 10:00 at night and from 3 feet away I can still feel the heat radiating away from the brick.
It seems like we continue to purchase homes designed for other places in the country and/or the world and local codes seem to reenforce the madness.
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