Sunday, October 12, 2008

pots of gold; piles of trash

This has been a busy weekend. I had a friend over to look at several projects -- including, adding a new zone on the irrigation system while I cleaned up the yard.

I moved the fix-up projects outside because we have been having some remarkably nice weather. I managed to clear out some ferns and overgrowth in the rose garden and the rock garden. It looks better, but there is always plenty to do.

While doing the yard work, I started rethinking one aspect of this move. My idea was to leave everything behind when I move south in May. I did not want to have a house and possessions that would act as a lifeline if I found the going tough in Mexico. (I fully expect that I will hit topes. After all, I am moving for the adventure, not the comfort.) That was the reason for all of this immediate activity: to get the house in shape to sell.

But something did not strike me as being right. The goal was to get the house in marketable shape, and I would not do some of the things the same way if I had decided to stay. I almost felt as if I was insulting the house.

Tie that to the fact that the general economy is worse now than it was when I started this project a month ago.

So, here is what I intend to do. (And it goes against half of what Kim of Boston has been advising me.) I will do some of the repairs on my house -- those that I would do if I were staying. I want to add French doors from the library out to the back yard. And I need to replace the windows on the south side of the house. My brother can help me complete those projects.

I am going to have dinner with a former work colleague in the next few days. In the 90s he occasionally house sat for me. He has been looking for a small house, but they are rare in this market. He has tentatively agreed to house sit for me while I head south. It would work out well for both of us -- economically. And, because I do not intend to buy a house in Mexico in the near future, I can bide my time and put the house on the market when the cycle is back up.

Of course, as many of you have warned me in your own moves, everything is open to change. Who knows? Maybe the housing market will have a sharp swing up in a few months. Or maybe blue fairies will simply give us all pots of gold.

But that is this week's plan. In any event, there is plenty of work to do before I am on my way to Melaque.


glorv1 said...

Steve, we own a home in San Jose, that we have had on the market since March of this year. There is not even interest coming from the looky loos, so hey...we will be renting it out come January. Hope you get a buyer. Take care.

Steve Cotton said...

Now that I don't feel rushed to put it on the market, I feel a lot better.

Anonymous said...

so that's the change in plans! a good one it is too. i'm glad that will work out for you and your friend.


Nancy said...

Finalizing each decision is a very good feeling. I remember very well!

And I think that you're right about the house, even if the house sit doesn't work out with the economy not doing well more people will be looking for rentals.

Islagringo said...

Above all else, you have to do what feels right for you. We each have our own story of how we came to be where we are. Nothing is set in stone. Look at it this way. At least it got you moving on fixing up your house!

American Mommy in Mexico said...

Renting is working for us so far. Are you going to get Property Mgr or manage yourself?

Babs said...

And the other benefit, is when you go back to visit, you'll have a place to stay!

Steve Cotton said...

Teresa -- It does feel like the right thing to do.

Nancy -- As much as I would like to get the house sold and simply move south, it just does not feel like the right thing to do. There is some reason for this.

Wayne -- Not only do I need to do some repair work, I still need to go through my possessions and start sorting. The house sit gives me an opportunity to leave the art in place for a while.

American Mommy -- I do not have a property manager. This is going to be one of those arrangements that ecery attorney dreads to hear about: a deal between friends.

Babs -- And in familiar surroundings. That is one reason I wanted to sell the place -- to avoid the refuge syndrome. But I am feeling relieced over the decision.

Islaholic Trixie said...

Even if you feel comfortable with your friend, draw up a contract. It can save your friendship in the end!!

Billie said...

Steve, we held on to our house in Houston for several years and we just knew when the time was right to sell. It will work out.

Laurie said...

Steve, I have a friend who is staying in my house, too. I have had a few people interested in the house, but they haven't pursued it. God knows. And I love the way my friend keeps up my house. She also is available for US emergencies with banking, etc.

Anonymous said...

Hi Steve,

There are lots of reasons to own a house, the best and most obvious being you want to live in it. However, the idea that your house will be more valuable in the future than now is one which could well bring you grief.

At this point, anyone who has been awake knows that we are undergoing the biggest financial crisis since the great depression. Clearly this is affecting real estate values, as buyers are pulling back, and financing is drying up. With the damage that the crisis has already inflicted, we are unavoidably heading into a rather deep recession. Unemployment is likely to rise to 8-9%+, and this recession is likely to be protracted as Americans reduce their debt burdens and rebuild their savings. That is not an environment which is conducive to house price appreciation.

The second issue is less obvious, but becomes more pernicious with time. You are not the only one trying to sell a house to help fund retirement. Just as the baby boomers' formation of homes in the late 70's and 80's created a boom in residential real estate then, now their departure for southern or foreign shores is creating a headwind to real estate prices in places that are not considered retirement destinations. As time goes on, this trend will gain strength as more boomers retire.

As for anyone who tells you they waited to sell their house, and it worked out fine, consider this: they sold their house before this crisis erupted. You, unfortunately, have to sell it after, and the crisis has changed everything. Believe me, this financial crisis has changed the world, and it's not just temporary.

I work in the financial markets, and these last three weeks have been hell. The financial system is badly damaged, and it will not return in its past form. That means that credit availability will never again in our lifetimes be what it was 1 year ago.

So, I would urge you to only hold onto your house because you want to keep it. Hoping that its value will go up from today is, alas, almost certainly not going to happen. And as more people are thrown out of work, they will become forced sellers, further pushing down real estate prices.

Now, all that said, if there is some reason why your local market might remain strong (like it's a retirement destination, has rapidly-growing, recession-resistant industries), well, all real estate is, in the end, local. But please be aware of the really large forces operating out there.

Frankly, if I were to sell my own house now, I would try to really under-price it, create a lot of interest, and then see if I could get it bid up to something a bit higher. Otherwise I fear it would just languish on the market.

Meanwhile, any comp sale which is over 6 months old is suspect, and probably above the current market. I hate to sound dire, but this situation is worse than most people believe.

Hope it all works out well for you, whatever you end up doing.

Fond regards,

Kim G
Boston, MA

Steve Cotton said...

Islaholic Trixie -- Good advice on the agreement. We will undoubtedly agree on something.

Billie -- See Kim's comment. Good advice there. My head agrees. But something tells me selling is just not what I should be doing now.

Laurie -- Friends are of incalculable value.

Kim -- I cannot find one bit of flaw in your logic. And, if I were to advise someone in my position, I would say almost the exact same thing. But there is something else here that I cannot yet see. But it is telling me to wait.

Paul said...

Kim's words will likely prove to be good counsel for most people; however if you, Steve, are feeling an inner voice telling you to do otherwise, then listen to it. In my life, I've found that voice to be the only reliable guide I've ever had. It's always known what was best for me.

La Dulce and I are struggling with the sale of our home in the States. Not hearing alternative inner direction, I think we will be listening to Kim's wise counsel.

Steve Cotton said...

Paul -- I may very well rue my decision not to press forward with the sale of the house. But I tend to follow the voices -- except when they suggest that I burn down the school. (For the literalists amongst us -- that really was meant as a joke, not a confession.)