Blecccch. Since recovering from new year's, it's been a lot of working on the house, compounded by going back to work. Yuck. This weekend included a lot of errands, including buying a new pair of glasses. Apparently this is not covered on my health plan, and in the 10 years since I got new glasses, prices have doubled. Exciting stuff.
Kent and I have been talking about buying a house in San Francisco. We know some of the neighborhoods a little, and we've been keeping an eye on the MLS listings. We're not preapproved yet, so we're not sure how much we can actually afford, which isn't helping us limit our search to something reasonable (although we know places going for $1.5MM are for sure out of range). Since the housing market is no longer on fire, we were hoping to find some places that are at least not too shocking to our west-coast-desensitized-price-reactions.
We spent today in the city, doing walk-bys of houses that have been in the listings in the last month or so, and also walking around the neighborhoods a bit more to get the feel of the places. And do you know what? Even for dinky places (<1000 ft2), if a house costs less than $1MM, there is something really wrong with it. There's often something badly wrong with places listing for $1.2MM, but that's too depressing to get into.
One place we saw was a small house on a deep lot - it has potential, if we jack up the frame and add another floor, and maybe a garage. And renovate every room it's got. Only $875k for that one! Another place was listed for $899k, but had no parking, and no access, perched on the side of a hill. There was an interesting, art-deco-y place listed for only $1.3MM.
Disheartening. Worse when you consider what half of a $1.3MM would cost in today's market (my half would be at least $170,000 down, $20,000 in reserve for 6 months of P&I (principle and interest payments on the new loan), and about $4000/mo for P&I and taxes). Needless to say, I should start buying lotto tickets. I guess I could try to sell my house - with its good location and new kitchen and bathroom, I think I could get a good price for it. Time to break out some risk analysis tools to look at my options.
On the plus side, it was a beautiful day in SF today, and we had lunch at Fresca, a very nice Peruvian place on 24th St. in Noe Valley. I rediscovered the self-medicating value of a good margarita (or two).
My bathroom is this close to being done. We got the door back with replaced glass (the original was scratched in all different directions - like we wouldn't notice), it's all painted up, and the trim is done. We also did the caulking - the tape trick worked well, but I still hate caulking. it's messy, and when you screw it up and try to fix it, it invariably gets worse.
More pictures soon....
5 comments:
I have never had the desire to live in a big city like SF, LA or NY. I’m too kicked back for that life style. You and Kent seem to enjoy the “night life” of a fast moving city, so that would be a good choice for the two of you.
The downturn in most of the housing market doesn’t seem to hit the bigger cities like SF, there is no more room for growth, and as long as there is any demand for housing the prices will remain high.
Are you two considering keeping you present houses and renting them out if you do move? With the improvements that you’ve made to both houses will you be able to pull in more money then the mortgage payments? Or would you go under the mortgage amount and claim the deduction on your income tax? That’s what Bobbi does, and it works out well for us, along with the LLC I have with my company. I (we) have not paid one cent of state or federal income tax since I bought into that LLC 11 years ago. Hee, hee, hee.
What is an LLC? Tell me more...
If we can afford it, we'd like to keep our places for a while until the markets come back up. Annoyingly, we could have rented them for above the mortgage payments even without making any improvements (he bought in 2000, I bought in 2001). The thing is, we can get up to $250k tax free each if we sell each house as a primary residence. The problem is we'd have to sell and close escrow within 3 years of moving out (the place has to be your primary residence 2 out of the last 5 years, or you pay income tax on the entire capital gain from the sale).
That said, with improvements and location I think I can get a good price for mine even now.
We actually like the quiet neighborhoods in SF that are walking distance to the fun stuff. :) As long as I don't have to park on the street, it will be good.
LLC - Limited Liability Corporation
Then our company moved up here they split it up into several fractions for their own tax purposes, we even have a dummy office in Nevada, they get out of paying some sort of taxes that way. One fraction is Tri-Release LLC, which owns the machinery which I, as several others, bought into for $10,000. The benefit is we get to claim the depreciation of the machinery as a tax right off. This might be the last year of it’s usability, for you can depreciate just so far. But what happens then is we get our original investment back ($10,000) and turn around and re-invest in the LLC or they re-organize the LLC and we invest in that, and again start taking depreciation right-offs. I don’t understand it all of it, but it has worked out very well for me and Bobbi.
I'd be amazed to hear of anything in SF under 800k. I love SF, although I hate driving there. :P
Turns out there are 67 listings for between $350-500k today. Most are way down by Daly City (south border of SF), or in some dicey neighborhoods, but they're there.
We're debating about the shack on the relatively big plot - zoning there would allow for a second building some day. Hmmmmm....
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