DIARY

Get Real

Alright, so here’s the big take-home from our house-hunting trip:

I have to get real.

Like, really real.

I love our house in Tarrytown – so, so much – but over the past year we’ve realized that if we were going to stay on the East Coast for the long-term we’d eventually want to move. There’s just some stuff that we’d really like to have in a “forever” house: an open kitchen, for example, so whoever’s cooking can also be hanging out. Actual closets. A playroom-type area on the first floor would be great.

And so I started out on this trip with these grand plans of finding a house with all those qualities that are missing in the place we’re in now. I was all “ooh maybe we can find somewhere with exposed beams and a pool.”

I did find one house with exposed beams and a pool. You know where it was? Alaska, basically. We drove over a mountain to get there. I’m not even kidding: an actual mountain. If I wanted milk? No biggie; just a quick forty-five minute jaunt.

You know what else was in our price range in the town I decided I wanted to focus on before I understood the insanity of the market out there? A cabin in the woods. Like, an actual cabin. With one room. Oh, I’m sorry: it did have a second room, except you got to it by climbing a ladder. And not in a chic loft-type way; in the “there is a wooden ladder on the outside of this house and you have to climb down it to access the 10’x10′ cave beneath” way.

So after that little misadventure, I went ahead and refocused on slightly less rural areas. We ended up making an offer on a house at the top end of our price range, and got outbid by so far that it was ridiculous. And sobering. Another one of the houses I saw needed a hundred and forty-five thousand dollars worth of work – which put us out of the running anyway, obviously…and even if it hadn’t, there were FORTY offers on it.

Forty. Offers. On a house that needs a hundred and forty-five thousand dollars worth of work to make it livable.

You guys, we live in Westchester. For those of you who don’t know this area, Westchester isn’t exactly what you’d call an “affordable” part of the world, and so I figured, you know…I’m not easily shock-able when it comes to housing prices. But while I knew the South Bay was expensive, I certainly didn’t expect this. I didn’t realize that I’d very literally be begging to move into houses that are smaller than the one we’re in now, except there’s no way anyone will listen to our begging because there are other people throwing cash offers for fifty thousand dollars more at them. (And renting doesn’t make sense for us for various tax-related and slightly boring reasons that I wasn’t planning on getting into here, but if you’re curious I totally can; just let me know.)

Anyway, my broker and I drove around town looking at one-room cabins and getting outbid on houses, and then she told me that I had to get real. If we want to be in a good school district, we have to compromise on other things. Space, for example. But as not-exciting as this was to hear, it still made this trip intensely valuable, because now I understand that the fact is that we’re moving to one of the most expensive places in the world, and a big part of what we’re paying for is the opportunity to live in California, to take day trips to the beach and to the mountains and to be able to play catch outside even in February. That’s more important to us than anything.

So. What Kendrick and I have decided to do is to take all this stress down a notch, and to try to simplify. No more looking at houses at the top of our price range (by which I mean the loan amount that we’re eligible for) that we’re obviously going to get outbid on; instead, we’ve decided to look at places that are in a more affordable range for us so that we have the room to go up a bit and actually win the thing. Right now we’re thinking about a townhouse that I saw that is beautiful and has great light; it has slightly less space than we’d like, but we could make it work. And it’s in a good school district, is super-close to where Kendrick will be working, and – again – we can afford it without straining our finances. We might grow out of it after awhile, but in the meantime we would not be overextending ourselves, and we’d be making this transition less stressful on all involved, and there’s a tremendous amount of value in that.

I’m always wary of writing about these things when they’re still in flux, because if there’s one thing I’m certain of its that trying to buy a house never, ever, everrrr works out in the way you planned it to – and who knows, maybe we’ll decide not to bid on this house and end up in a temporary place for the summer while we keep looking; that would be fine too. Or maybe we’ll end up finding a dream house that’s too expensive but we can’t resist it. Or maybe we’ll end up in that one-room cabin. But regardless, this is where we’re at now.

At the getting-real place.

  • kb

    My mom recently said to me “this doesn’t have to be the forever ___” and it can be applied to so many things that I want to be forever or have placed so much pressure on making them forever. I say it sometimes about small things, like a pair of shoes or big deals like buying a house ( we’ve moving in nyc, similar cut throat real estate market) Like you’ve said before, you are moving to have California to make it your backyard, which is pretty amazing no matter how you look at it, and if you have a smaller place, that’s less maintenance which means more time to go out and enjoy all that CA has to offer.

    • jordanreid

      love this. yes.

  • ThePinkSuperhero

    I’d be curious to hear why renting doesn’t make sense! Finances and real estate is never boring for moi.

    • jordanreid

      Of course! There’s two primary reasons that it makes more sense for us to purchase (the first applies to anyone considering buying and the second applies only to people who currently own a home and are considering purchasing a new one):
      1) You get significant tax breaks as a homeowner (a 4000/month mortgage, for example, could yield about 700 a month in tax breaks, making the “actual” monthly payment more like 3300) – you can choose to increase the number of deductions and reap the benefits immediately (e.g. with a higher paycheck every month), or have the benefits accrue and create a situation where you’ll get a tax return at the end of the year;
      2) If you make money on the sale of a property, you have two years to reinvest that money without paying taxes on it (this creates incentive for property owners to reinvest in the market rather than essentially taking their money out of the playing field, as it were).
      In our case, the area we’re looking at is so expensive to rent in (largely because the housing market is so insane, which drives up rental prices as well) that the tax break on mortgage payments makes the monthly cost of ownership much more comfortable for us than the monthly cost of renting. And we did end up making money on the sale of our house, so we have two years to reinvest that…but all other things considered, it seems smarter to reinvest right away rather than move twice over the next year or year and a half.

      • Valerie

        I need to be using your accountant, because #1 has never worked out that well for me. The first year I owned my house I had a great tax refund, but then I got married and it’s shrunk considerably, especially as I pay less in mortgage interest. I think in areas with crazy high property taxes (like New York and California) this can be the case, but for many of us it just isn’t as beneficial. Womp womp.

        • jordanreid

          that could certainly be the case. also, i operate a business out of my home, so there’s a benefit there, too – although i’m pretty sure you can also deduct part of your rent (up to 1/3, i think…?) if you have a home-based business.

  • Laura

    Oh dear, I just bought my first condo and went through the same thing. There was a perfect (perfect!) one that would mean that I was eating beans and spaghetti for 5 years, never going out of town, but: perfect.

    I settled on one at the bottom of my price range, with not a design feature to speak of, but in which I’ll still be able to have a life. And i’m going to spend *some* (not all!) of the difference in cost between bland and perfect making it Capital letters “LAURA’S HOME” (helloooo – electric fireplace and vintage-style wallpaper in an otherwise super-modern building), and I’m sure I’ll love it even more that way.

    • jordanreid

      i think that’s a great decision; you don’t want to give up your entire life for your home, right? we ended up actually not making an offer on this townhouse because apparently it’s going to go over 100K over the asking price (SERIOUSLY), which makes it wayyyy over there on the other side of our price range, which was totally not the point of the whole scaling-down thing. UGH. uggggggh.

      • Laura

        Sorry to hear, I live in Toronto where everything goes “over asking” as well – found it SO frustrating. SOOOOO many times I’d look at listings and get excited because “OMG HOW PERFECT AND I CAN AFFORD” except – not. It’s like you’re forced to look above your price range and fall in love with things you can’t afford even when you’re trying to stay in your price range. Actual worst. Good luck though, this is just the hard part, right?

        • jordanreid

          that’s it exactly! i was looking just over my price range (because in “the old days” you put in an offer BELOW asking and negotiated) and falling in love with properties, then had to completely abandon any illusions about them and get serious about sticking within my price range…and now i’m just going lower and lower and lower with the knowledge that i’ll have to pay tens and tens of thousands of dollars more than the listed price. i’ve had to do some serious lowering of expectations, but that’s just how it goes. and i’m excited to get my hands on a bit of a fixer-upper, if that’s what we end up with (and i can’t imagine it’ll go any other way).

  • Mariana

    I’m also curious why it doesn’t make sense to rent. We’re hoping to buy soon too in ny.

  • Jackie

    Taxes are aggravating, but so is living on top of each other in a cramped space. I would recommend taking a look at Foster City, which would give your husband quite a commute but is a pretty community on the water with nice neighborhoods. It’s between the Hayward and Belmont Caltrain stations. I don’t know what prices are like there now, but I rented a three-bedroom house with a pool and lovely backyard (with fire pit) for $3k/month a few years ago.

    I know quit a few people in Silicon Valley – including venture capitalists – who rent. Depending on your particular situation, and a bunch of other circumstances, it really could be the best move. (And having moved 10+ times in the past decade, including a hellish stint of having a place in Palo Alto and a place in Manhattan – meaning all of my belongings were spread between coasts in a way that made my life feel uncomfortably nomadic/unstable – I know moving twice in two years would suck. But the day-to-day of feeling you have no room to move around in your home, and can’t have privacy (or give it to your children), might be more upsetting. It would certainly be more sustained than the relatively short-term pain in the ass of moving.

    • jordanreid

      i have a daily alert on rental prices, and they’re just so out of control. foster city is somewhere we considered but it’s just SO important to us to have as much family time as possible, because that’s part of the whole reason for our move – finally just being together after two years essentially apart.
      but yeah, kendrick and i discussed the cramped-space thing, and i think we both do better having a little more room. he’s got all his music stuff and wires, which get really out of control unless they’re in a contained area; i’ve got lots of props and shooting equipment; our kids have a bazillion toys…and we could (and will) downsize all that stuff when we move, but still: no matter what, four people and two dogs in a small space would feel cluttered, and i worry that it would create arguments that don’t need to be created.
      we ended up not going for the townhouse because it was too expensive (looking like 100K over asking, with potentially over twenty offers…UGH) and because at that price we just feel like we need more space. i’m looking now at more fixer-upper-y single family homes that are on the way low end of our price range so that we’d have space to go up in price but still have…space.

      • Jackie

        I think this is similar to planning a wedding without access to unlimited funds: You pick two things that you cannot compromise on, and let go of the rest. So if it’s minimal commute and space, then a lot of other stuff is out of the question (perhaps even a decent school district).

        Commutes do totally suck, and I get wanting to maximize family time, but the reality of working in tech is that you often have to work long hours. So you could end up compromising on stuff just to be close to San Jose and, with work constraints, not get much weeknight time together as a family anyway. Then it’s all about the weekends, which you are spending in a small space/scary neighborhood because you thought being close to the office would matter five days a week. Then you start resenting the fact that you compromised on space/safety/price/schools for the sake of a location that doesn’t much matter anyway.

        Not trying to be negative, just speaking from experience of life in the industry (and especially in the very peculiar world of Silicon Valley, which is a bubble of oddities that nobody inside it seems to realize are not normal). And everyone values different things depending on their circumstances and preferences. If it were me, I’d consider sacrificing on the commute so my family could have a bit of room and a great neighborhood, and prioritize the crap out of weekend family time, assuming weeknights together will be a rare treat anyway. (Also, if you are somewhere near a Baby Bullet train stop, like Redwood City, you can get to work pretty quickly. People bag on RWC, but I worked there for two years and loved it. It’s a place to invest, if it isn’t already astronomical.)

      • Cathy

        Foster City is on fill. Never buy a house on fill in the Bay Area. We have Earthquakes, and fill land becomes jello. Look at homes built on bedrock. Stay away from Redwood Shores too.

        xoxo
        Cathy

  • shilpi

    hey there! I’m a real estate reporter and while I’m not en expert on the Bay Area, i thought I would chime in. (I’m also a mother of a young child, a city dweller, a home owner, etc etc — basically on the same timeline as you, which is why your blog has continued to interest me.).

    1. Renting for 6 months, or a year, might be short-term more expensive, but could lead you to make a much better decision. Is it possible that there are still “unknown unknowns” about both your life there and about the area that would impact your final decision? What if Kendrick’s job isn’t what he expects, or he ends up jumping to another company, or Ebay downsizes? What if, like one of the commenters noted, he works 9-12 hour days and isn’t home to see the kids at night, anyways? What if you decide that CA and that area actually IS restricted to millionaires, and you want to move back to the East Coast? What if you get a different job, or your job changes somehow, and your budget either grows or tightens? What if there is a housing option you don’t yet know about that is actually perfect for you? What if you absolutely fall in love with a town that you don’t even know about yet? What if there are idiosyncracies to the school options that you don’t know about, like lotteries or charters or private schools, that would make the public school district less important?

    2. in regards to home ownership, we always found it much easier to plan on a 5-year scale rather than a “forever” scale. (for example, we bought a two-bedroom in the city, so that we could live here together, have one baby, send that kid to a pretty great pre-k/elementary school in the area, and then make another decision when the need arises (we live in DC and many public middle schools and high schools are quite bad, so something will need to change, but not soon.) Real estate-wise, thats also sort of the rule-of-thumb time frame in regards to guaranteed price appreciation. So, can you buy a place that you’ll be happy with for five years? The “unknown unknowns” factor is big here, too — who knows how the quality of the school districts will shift from area to area over the years? who knows what the water/drought situation will be like in CA in 15 years (as in, maybe people will start moving away and home prices will drop again.) Many, many reasons why planning for a far-away future is difficult-to-impossible.

    • shilpi

      oh, and one tip! some folks I’ve talked to had really good luck pursuing homes that had been on the market for a very long time — usually, it’s because the homes are overpriced, and the owners are willing to consider a low offer because they are so ready to sell. These also don’t attract biding wars, because a lot of folks assume that “long time on the market” = “sucky house”. sometimes it does, but sometimes these overpriced gems appear.

      oh, and look at listings with bad (blurry, sideways) photos. Also keeps the competition down, and sometimes it just means its an awesome house with an owner who is distracted by something. our awesome place was in this category, and we had hardly any competition in a very competitive market.

      • jordanreid

        this is GREAT advice. thank you.