House Shopping: The Addiction Continues
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Well, here we go again…
A few weeks ago, Holly wrote about how we are “houseaholics“. When you combine this with the fact that we aren’t very happy with some aspects of our current residence, you have a recipe for house shopping on your hands. Although we haven’t made any final decisions as of yet, we are certainly considering the possibility of moving again.
As usual, the moving bug hit Holly first. Like the sleuth that I am, I first noticed that something was stirring when she started showing me emails of new
“products” houses on the market sent to her from our dealer realtor. I’m not sure if she broke down and requested these emails or if our realtor just thought she would give us a little nudge. Regardless, I had a feeling about what was going to happen next…and I was right.
Soon, I began catching my lovely wife staring at real estate websites, browsing the available selection. When I questioned her about what she was doing, she would coyly reply that she was “just looking.” After politely reminding her that we already had a house and a financial plan to boot, she would give me her best puppy dog eyes, bat her lashes and explain that she just liked to look. I knew that this wasn’t going anywhere good – and fast!
The house search cooled off for several weeks. Of course, I assumed that all was back to normal and the house hunt was put on hold. As I often am, I was – of course – wrong. After my suspicions had been properly misdirected by this lapse in the search, a few weekends ago, my wife sweetly asked what I wanted to do for the day. I said that I didn’t have any plans and asked her opinion. She told me that she wanted to drop by an open house place that she loved. RED ALERT! RED ALERT! INCOMING! INCOMING! But, I already knew that it was too late.
Although I immediately put my guard up, she deftly evaded my fruitless attempts to stop the upcoming process. “Come on, it will be fun,” she encouraged me. “We aren’t really looking. It will give us something to do.” She was starting to win me over, playing to the weakness of my own real estate addiction. Besides, what harm could there be in looking? Plus, the kids were going to come and look at the house with us so we couldn’t be that serious, right?
I knew it would happen, and it did. Walking into that open house, I felt so dirty, but I felt so good at the same time. You see, I’m a house addict too, but I’ve trained myself to fight the housing urge over the last few years. On the other hand, I could already tell that Holly loved it. I, however, would need a little convincing. My wife would drop subtle – and not so subtle – hints that she wanted to move. For a few weeks, I was able to fend off the urge that was growing inside of me, but I have finally given in. We are officially on the market for a new house.
Rethinking Our Dream House
Last time we thought about moving, we were looking at “upsizing” our house. This time, I am glad to say that we have kept our senses. Rather than searching for a house that is almost twice the size and has several acres of land, this time we are looking at real estate that is near the same size as our existing house. This is much friendlier on our pocket-book and will fit in better with our long-term financial goals.
So, if we don’t want to trade up to a starter castle, why move? Why would we not stay in the same place? I’m glad that you asked!
Why We are Considering a Move
There are things about our current house that we don’t like and that we can’t change. The yard sucks and is beyond my, admittedly, weak powers to heal it. We don’t like where the house sits on the odd-shaped lot. Our back yard is small and nearly unusable because of the numerous fruit trees. That is a real bummer because we have young children who love to play outside. Essentially, every time we go outside, we get anxious because we hate the yard. That isn’t really worth it to us anymore.
One of the main reasons that got me to consider a move was the school system. Our current plan was to pay off the house that we are living in within three years. After that, we planned on looking at a house in a different school district. However, in three years, our oldest will have already started school. Even though she will only be in first or second grade, why not move now while prices and interest rates are low. Since we have the ability to start her off in the school where we intend for her to go later, why not do that now?
The last thing that pushed me into full-fledged house shopping was that we have made a promise to ourselves to pay off the new house way ahead of schedule. The house we are currently considering is priced at a point where we can have it totally paid off in four years instead of three. Since the house we are looking at can provide us with multiple things that our current house can’t, the increase in our happiness outweighs the additional year of payments.
No Decision Yet
So, essentially what we’ve decided is that our savings goals have to be a balancing act. While we aren’t willing to compromise our savings goals too much, we also are very open to increasing our happiness quotient. If we had consumer debt, we would not be considering this move at all and would be paying down our debt instead. However, since this is only a small step up in price, this option is definitely open to us. Essentially, we are trading one mortgage for another…but we think it is going to add a huge amount of value to our lives. We will be sure to keep you updated on our decision.
What do you think? Are we crazy? Are we addicts? What should we do? Let us know in the comments below!
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You should totally go for it! Adding an extra year or repayments is nothing compared to living in a house that better fits your needs and not uprooting your child after a year or two of school. It sounds very positive and reasonable… if you don’t go for another “house fix” in a year!
That is the key – once we are in, we’ll have to stay there for a very long time.
I would agree. If you find one that fits, that is what you should get. We had to adjust things to get our dream house too but we don’t regret it.
Like you said though, you have to know you will be ok living there for next decade or more. This something you two really have to evaluate. I think once you get settled in with kids, you won’t have the desire to move anyway so this will become a non issue.
With the rates at rock-bottom despite the fact that the Fed is printing money like they never have before, I think now is a perfect time to buy a new home. Combine that with relatively low prices on homes and it’s hard to argue that now is not the right time to buy.
We think so to. I wish we had some extra cash laying around and we’d probably buy some more rentals…
I can see it from both sides. By adding only an extra year with an already aggressive payoff is not problem at all. As a parent, I can totally relate to wanting to be in a better school district and a nicer yard.
The one word of caution I have, and I am sure you’ve already thought of this, is to not look for ways to rationalize a move. I know we all do it, I have way too many times to care to count. But, rationalizing can be a powerful way to trick yourself into doing something that later on you may regret.
I am not saying your doing this, just playing devils advocate I guess. I know that it would be tempting to me if my wife and I were in the same situation.
I totally agree about rationalizing. It is an easy thing to do. There is a fine line between rationalizing a move and actually moving for good reasons!
I am always looking at houses online and me and the boy even drove around the other day and looked at houses that were for sale (we didn’t go in, just looked at the outside of the house).
I think with the way that the housing market and interest rates are now, that buying a new house isn’t a bad idea.
Thanks, Michelle. I appreciate you enabling me.
Buying new houses can be exciting, but it’s also a very expensive habit to get into.
If you feel you are going to be happier in the new house and you can afford it, then I say go for it. You only live once plus – happy wife, happy life. Or so they say…
Yes, “happy wife, happy life.” I like that saying.
Of course you would;)
Although home prices have recovered some, they are still low relative to where they once were. Group that in with extremely low interest rates and it makes a good time to buy. Also, in any purchase car or house, once you get the fever, it is hard to get rid of it.
You are so right. Luckily, if we were to move we would have to be 100% sure that it was the right thing to do. We have A LOT more stuff now and two kids. I wouldn’t uproot my kids and go through the pain of moving unless we were a) getting a great deal b) absolutely loved the house c) thought it was best for our family.
House shopping is fun but actually moving is a total pain in the ass!
HA! Sounds just like my wife. I know when she is looking at realtor.com, the house hunt has already started without me.
My opinion is you should go for it. You’re in great financial shape and if it works for your budget, do it, you can still pay that house off in record time, even if you have to delay a year. Best of Luck.
Looking is so much fun! I think we are just going to see what happens. If we move, it would have to be our forever home….so I would rather wait for the perfect one to come along!
Sometimes, you just have to move. I understand your reasoning. I would LOVE to buy a house. Every day, I look at the listings. We are waiting for the prices to drop (Vancouver is extremely over inflated).
I have heard that about Vancouver area house prices. Prices are dirt cheap around here so it is the perfect time to buy. Couple that with 15 year mortgages at 2.75%. It’s hard not to at least consider the possibility.
Hate to be the pooper of the party, but here’s the truth: it’s no longer “the best time to purchase a house.” That was two years ago. It’s not the worst time, now, to be sure. So if you want to do it, do it.
But consider that the next recession might bring a better deal. A next recession is a guarantee, but we don’t know when and we don’t know if it will push house prices lower than they are now. So the next recession may or may not bring a better deal. But just keep that possibility in mind.
From a financial point of view, your housing market holds the key to the sanity of the purchase. How has it performed in the past, and where are you in relation to that? How are house prices in your area compared to, say, two years ago? If they’re up just a little, you’re still good. If they’re up more than, say 10%, maybe you’re a little “less good.”
One more thing: make sure the mortgage has a fixed rate. We might see more inflation ahead and a variable rate will hurt you for sure. As for interest rates, Bernanke and the Fed have been clear that rates are going to remain this low for at least another year, maybe two. So don’t let your realtor’s (or your own) breathless fear of climbing interest rates push you into a decision that doesn’t make sense without that assumption.
Patience… don’t you just hate it when someone preaches it at you?? 🙂
Lol, no. I don’t mind at all!
We live in the midwest and housing prices have stayed pretty stable here. I have been watching over the past year and they have gone down slightly. Even the tax assessment on my house went down 10K this year. I think we might be at the bottom…but there is no way to be sure!
We would never get a variable rate mortgage. 15 years are now at 2.75 and that is the only mortgage we would get!
Remember to invite us to the housewarming! 🙂
Hey, weren’t you just trying to talk me out of it a minute ago? You guys are a bunch of enablers!
Honestly, what do you think?
Party animals, not enablers — there’s a difference! 🙂
Seriously, I think you may be at the end of the window. I don’t your local market, so I don’t know how prices have moved. When you reckon they’re still low, do you have proof, or is that something you’re telling yourself to justify the purchase (Seth Godin’s telling yourself a story)?
If prices are close to their low, then you’re good to go.
Here in Denver I wouldn’t be buying any more. The window for good prices closed earlier this year.
We’re considering trading down, and the best time for that is when prices are high, because then the gap between the sold house and the bought (smaller) place is at its highest. For trading up, you want to do that when the gap is the smallest — bottom of the recession. (I wrote a post on that for Crystal: http://www.budgetinginthefunstuff.com/honey-how-can-it-hurt-just-to-take-a-look/)
What will you do with your current home? Rent it out? or try to sell it? Since real estate is a long term deal, renting it out may not be such a bad idea. I agree with William that this isn’t the “best time to purchase” when it was more true to say that a couple of years ago. It’s not so much about timing as it is if it’s the right decision to move. I don’t know what your home looks like, but is it possible to remodel it? Or do you have to move in order for your oldest to attend a specific school?
As you already know, location, location, location will help hold property value. Is a 15 year mortgage the best approach? Will it provide you with the most flexibility? The point of a mortgage is to leverage. For example, if you have a $2,000 budget for a mortgage, and the actual mortgage payment comes out to$1500, then you have an additional $500 to invest or grow it in other way….you leave yourself with more opportunity. Will a 15 year or 30 year mortgage provide the flexibility you need?
And it sounds like you plan on living in this home for a long time. Which means you are not a “mover.” So, moving to another home sounds like would make sense. It’s not like you are trying to or needing to move every 5 to 7 years.
Good luck with all decisions. I’m sure you will make the right one for you and your family. 🙂
We would sell our current home. We already own two rental properties and that is all of the liability that we want right now. Plus, since we have two kids we just don’t want another rental at this time. We plan on buying more rentals later when we have more time to take care of them!
Our house is nice but remodeling wouldn’t help. We don’t like the yard or where the house sits on the lot. We also dont like the proximity of the neighbors which is also something we cannot change. I am also not a big fan of the floor plan and I think the only way to really change the floor plan would be completely cost prohibitive. And even if we did redo the house, I still hate the yard.
We have a 15 year mortgage now and would definitely get another 15 year. And yes, we are looking for the house that our kids finish high school in. We want to stay a really long time!
Well the good news is there is plenty of inventory in the Indy area and outside of IPS there are a lot of good school districts. Of course I loathe moving more than just about anything in this world so I would vote for staying put.
But I also understand wanting a good sized yard so the kids can burn off some energy outside… tough decisions. Makes me glad the place we have is in a good school district, is plenty of house, has an awesome yard and great neighbors.
I am not envious of your position at all!
I hate moving and love it at the same time. So much excitement and planning and work work work! Ugh- and we have sooooo much more stuff this time around just because our house is bigger and we have to kids- more furniture and kids stuff, toys, etc.
First real estate, then marijuana….
It’s my gateway drug!
Go for it ! You have great reasons for wanting to move and adding an extra year on of house payments is definitely worth it in the long run to increase your happiness!
Don’t think you’re crazy – if you’re on track to pay off your current house so soon, what would the numbers look like to keep it and rent it out?
Also – have you considered buying a smaller house than your current one? Trading indoor space for outdoor space if the kids love the yard so much?
I thought for a brief second about renting it out since we have the two other rentals…but there are a few problems with that.
1. Its a 2400 s.f. house and there isnt a big market for larger homes (hard to rent out)
2. I’m not sure I want the liability of a third rental home with our kids being so small
Yeah, we have definitely considered buying a smaller house. The one we are looking at is about the exact same size as our current home…it just has a magnificent yard and is in an amazing neighborhood with 5 star schools.
Congrats on the decision! I find it awesomely hilarious to follow PF bloggers though and see how our lives/decisions progress. I loved reading Holly’s post about being a housing addict and saying you were NOT going to buy a house….and boom…one month later you’re ready to buy. 🙂
My wife and I have a weakness as well in regards to real estate. We’ve been looking at houses lately and it sure is a lot of fun!
It is fun looking, isn’t it? And I suppose that that is part of the problem. Luckily, looking is “free” and it only costs when you pull the trigger!
I may advocate that I am very much into impulse decisions… but I feel I know enough about the situation from the last couple of posts to say JUST GO FOR IT!! 😀
Yet, another enabler. Are you guys really my friends?!?!
Wait…didn’t you guys just refinance? If you did, you might be hurting your finances if you move now, even if the mortgage isn’t that much more. Look into it before you jump! To me, it sounds like you guys have already made up your minds! So….good luck with the move!
We just refinanced one of our rental properties a few months ago, Michelle! We refinanced our house that we live in….but that wasn’t this year.
How funny… we’ve been adding fruit trees.
I wouldn’t mind them really if they werent so close to the house!
I know the feeling very well! My wife loves watching house hunters and I constantly have to make sure I don’t get too excited when I find myself online looking at houses.
Hey, there is nothing wrong with looking, right?
I wanted to imagine how my life be if I have two house.
One for my hometown and a townhouse.
But you know what, I’ve also want the feeling of house hunting.
So long as you’re still going to be paying it off in such a short period of time – definitely GO FOR IT. We moved when our son had just finished 2nd grade – primarily to get into a much better school district. It broke his heart (initially – he did get over it) but that was many years ago and I still cringe when I think of how hard that was on him. Wish we’d been in a position to move before he started school.
That is my worst fear. I would hate to break her heart like that….especially when she gets so attached to people and settings. We had to switch daycares when she was little and she really missed her friends.
And, it seems silly to live over here when we could move ten minutes away and be in an award winning school system. It’s also on the other side of our work so it wouldn’t change our 8 minute commute at all!
If you think you will move in a few years anyway, now is a good time. I think rates are going to stay low for a while,but can’t get much lower. My husband transferred schools twice when he was little and then again in high school because his parents changed houses. It was very traumatic. He still remembers it, and he never did well in school until he went back to college in his late 20’s. Don’t know if you can blame it all on the moves, but something to think about.
That is definitely something to think about =(
I hear you with the kiddos. We’ve been contemplating the same thing for almost the same reasons. Haven’t made a definitive plunge, though!