Monday, November 1, 2010

Help! My Checkbook Has Sprung a Leak

We have embarked on a new life journey. After spending the past four or five years resting comfortably and lazily in our apartment we took the plunge and joined the ranks of the homeowner. If you read this blog you know we were looking for a place last fall but gave up. The market just didn’t seem right. Prices have dropped since then as have mortgage rates. The pieces simply fell into place for us. So during the next few weeks we will be devoting most of our time to moving.
There are several reasons for making this move now. My in-laws who are very elderly require an increasing amount of care. A few years ago when they lost the ability to keep up with the maintenance requirements of a home they sold it and moved into an apartment. Their timing was perfect considering all of the health issues that have occurred since then. In any event it is easy to see how important it is to live close to them so we can drive them to their appointments and generally lend needed assistance. Neither of them should be driving a vehicle at this point and we feel some responsibility in maintaining the public safety. We will be living about a mile from their place and that seems close enough.

The other reasons for moving now involve money. Despite prices dropping continuously during the past year, homes remain stubbornly unsold on the market. For any given home there is a maximum price that a buyer is willing to pay and an minimum price that a seller is willing to accept. Right now those two numbers are too far apart. For many of those homes where these two numbers converged a sale has taken place. I figure the market probably still has a 5-10% drop ahead of it and worked that into my offer. I have no illusions about timing the market just right. I’ll settle for close.  Luckily for us the seller accepted the realities of the market and dropped their price.

With so few properties selling right now it is difficult to judge by comparison what a fair price is but the tax assessment on the place we purchased dropped $31K since last year and we paid a price about $55K less than that new assessment. Overall I think we paid a fair price neither being cheated nor taking advantage of the seller.

Now we are in the process of cleaning, painting, and updating the kitchen.  The new stove and dishwasher gets delivered tomorrow and the garage door will be repaired right after lunch.  I think I am beginning to understand what economists mean when they talk about money having velocity. 

4 comments:

Jenn said...

Congratulations on your new home!

Unknown said...

W00T! Great times are just in front of now...... You should watch the Money Pit, with Tom Hanks. lol. But it is nice to Have a place of your own. Keep us updated as to your progress. If you need a hand let me know. I've owned three houses. And have become quite good at fixing everything.

Robert~

Physicalchemist said...

Thanks Jenn and Robert for reading my ramblings. I've seen Money Pit and happily am not in that situation. I think I have a topic that will last me a while.

Unknown said...

How is the house coming??