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Hi All,
In the next year, give or take, I might be in a situation not unlike the good hosts of this forum were when they decided to move to the country to pare down expenses; though, unfortunately, I’m a little older than they were then – and I’m a little older than they are now. 😉
Be that as it may, I would like to pare down expenses and sell FT. This isn’t so much a what should I do question, but more where could I go?
A lot has changed since Jay and Ryanne moved to the country. One of the biggest changes of course is property values. That has helped and hurt me. I could potentially sell my place for more than I bought it for, but, in the meantime, property taxes have just about tripled in the last 10 years and don’t show any signs of slowing down.
I may end up staying here in the PNW, but, as far as I know, I can’t save much by moving to the country here – or it seems anywhere in the west. Everything is just too damn expensive now.
So, I am seriously considering getting out of dodge. It doesn’t have to be the country of course, it just has to be relatively cheaper than it is here – enough to really make it worth it.
Is it even possible these days to find (relatively) cheap places in “good” areas that are great for sourcing or at least close enough to get there without it being onerous?
There are a million other questions that this brings up, e.g., what is “good,” but I’ll start with that and see if this goes anywhere interesting.
I’m not sure where to post this, so I might try in the Podcast Comments if not many see this here.
I also thought I’d post this because it seems like a Jay topic 😉
– Cheers
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Dylan wrote:
Hi All,
In the next year, give or take, I might be in a situation not unlike the good hosts of this forum were when they decided to move to the country to pare down expenses; though, unfortunately, I’m a little older than they were then – and I’m a little older than they are now. 😉
Be that as it may, I would like to pare down expenses and sell FT. This isn’t so much a what should I do question, but more where could I go?
A lot has changed since Jay and Ryanne moved to the country. One of the biggest changes of course is property values. That has helped and hurt me. I could potentially sell my place for more than I bought it for, but, in the meantime, property taxes have just about tripled in the last 10 years and don’t show any signs of slowing down.
I may end up staying here in the PNW, but, as far as I know, I can’t save much by moving to the country here – or it seems anywhere in the west. Everything is just too damn expensive now.
So, I am seriously considering getting out of dodge. It doesn’t have to be the country of course, it just has to be relatively cheaper than it is here – enough to really make it worth it.
Is it even possible these days to find (relatively) cheap places in “good” areas that are great for sourcing or at least close enough to get there without it being onerous?
There are a million other questions that this brings up, e.g., what is “good,” but I’ll start with that and see if this goes anywhere interesting.
I’m not sure where to post this, so I might try in the Podcast Comments if not many see this here.
I also thought I’d post this because it seems like a Jay topic 😉
– Cheers
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Dylan’s original comment was lost so I reposted it.
I’d love to hear other people’s opinions. Back in 2008, there were definitely real estate deals if you were willing to “geographic arbitrage”. No one wanted to move to our rural county so we got a cheap house.
These days it seems like there are all kinds of investors snatching up land, homes, and commercial properties in all zip codes. Homes in our area have doubled in the last two years. Investors from out of state are buying up property to rent. Or Boomers are selling for high in the city and buying a retirement home for cheaper (but more than what locals would pay).
As far as your current home, other than high taxes…is it paid off? How much could you sell it for? How rural are you willing to be?
Obviously moving where other people don’t want to live is when real estate is cheap. If you want to live in a “good place”, it’s likely going to be more expensive. SoCal Joe on this forum sold his place in Southern CA for big money and moved to rural CA for much cheaper.
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Hey Jay, Weird. I noticed my post didn’t appear. I finally had to click on your name to find this. There was a yellow field above the post that said, “This topic is marked as spam.” There is also one above this reply. No idea what that means. I’ll send this and see if you get it before writing more.
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I have two new coworkers that transferred here from Portland. Even at our rapidly rising property costs, they were both able to pay cash for basically what passes for mansions here.
That’s why our costs are rising so high. People are listing 50-100K above market value and someone from a large metropolitan area comes in and says “I can’t believe this is so cheap! I’ll pay cash for this 3500 SQ FT home with a fraction of what I sold my big city 1200SQ FT dump for!”
even if they get a loan, the annual loan payment AND property taxes is less than just the property tax in the big city.
There is a home 2 doors down that was listed for $410k. I’ve personally watched our flooded creek flow through the bottom floor of this home like a raging river twice. Yes, that house is well into the flood plane. It did sell recently, but I think the price went down to just below $350. Still $100-125k more than what it really should be worth. about 2 years ago another home on my street sold for $290k and is just 1800sq ft. I know this because it was one of the comps when I refinances. Did it drastically raise my property value? Yes. Do I really consider that a good thing? No.
So now that I’ve made a long winded response, I’ll answer your question: Yes, you can move pretty much anywhere along the appalachians and drastically cut your cost of living, get a reasonably affordable home, and get plenty of good scavenging.
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Retro –
Thanks for the reply. Portland is more expensive than where I live, so I won’t have that kind of money to throw around. I would probably max out around $300k, but would like to spend less – and will probably have to.
Anyway, the same rise in property values is happening here, and from the price you listed, I wouldn’t necessarily be any better off…But I still do not want to be one of those people driving up property values. Also sometimes it’s hedge funds and corporations that are doing the buying to turn them into rentals. I could say something political, but I’ll just leave it at that for the purposes of this discussion. 😉
Curious what the property taxes are like too. What state are you in?
Good to hear from people about the quality of scavenging too…
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I almost hate to give away my little paradise for a reseller.
Sioux Falls is growing but still one of the cheapest places to live in the US.
No state income tax, low cost of housing, very reasonable property taxes.
And it’s a garage sale crazy town of 200,000.
There’s already a shortage of employees and with the huge Amazon fulfillment center being built, I believe more and more people will be moving here which hopefully, (for me) will mean an increase in property values.
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Steven –
Thanks for the reply. It’s funny you mention that because you did come to mind when I started thinking about high quality scavenging options. You’ve posted so much stuff, it’s seared into my brain. 😉 Of course the next thought I had was, too cold! 😉
I have considered it though and will keep it on my list. If I did move somewhere with extreme temps, I’ve thought about vacationing for the harshest bit, so nothing is necessarily out of consideration. Especially at this point, as I’m really just kicking around ideas…
What are property values for something decent these days? I guess I could look on zillow, but wouldn’t really know where to look or have local knowledge…
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Jay – It’s happening all over the world. For me, it will come down to math – but of course I want as much quality of life as possible like everyone else. And like most people, I’d like some land a 15 minute drive from town (that’s kind of a joke because these days that could mean an even more expensive home). I could go on, but yeah, it’s a question of how much things are and if arbitrage is still a viable option to get something decent.
I don’t want to give too much personal info out here, but I’d be looking in the $200k-$300k range. It doesn’t seem great when, “The median sales price of new houses sold in January 2022 was $423,300. The average sales price was $496,900.” The other figure I can give is that my property taxes are about $4000/yr. I could probably go an hour or so from a decent sized town. That’s not set in stone though.
I also have other ideas, like taking my show on the road and selling from whatever town I’m in, not necessarily on ebay, but maybe…i’ve heard some people have done that, but I don’t know the particulars…
I’m waiting on a few major things this year so I’m just in the thinking, pondering, and musing stage right now – but I also don’t want to be left in a situation where the real estate bubble pops and I miss my chance; so, I’m trying to be ready to sell (in theory anyway) in less than five months. We’ll see…
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I pay $1200 in property tax on my home. I paid $176k in 2012 and it is worth between $250-280k now.
as name says, I’m in WV.
WV has some of the lowest property tax in US.
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I live in a low tax county in VA. But everyone should remember: low tax, low services. Our public school system is funded at the minimum that the state allows. To the chagrin of many parents (except home schoolers 🙂
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Retro –
Sounds good. I’m a west coast boy. Don’t know anything about the south – or much about the east coast for that matter. As I was saying to Jay, I’m also considering traveling and selling. If it works out I could travel around and look for a place to live. I’m just playing with ideas at the moment…
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As Jay mentioned above, I sold my home near the beach in 2018 and relocated to a rural area in the high desert. The difference in home prices was about 3X.
Since then, both houses have appreciated greatly. I can’t imagine house shopping in this crazy market. Even though my former house has appreciated, it would cost me more to buy this one and my property taxes would be higher.
In California, we have proposition 13 which limits, how high annual property taxes can increase on a home you already own. There is also a proposition 60/90 that allows people 55 or older to transfer their tax base to another residence, as long as it is equal or lesser value to the home sold. This is a one time only benefit. To my knowledge, these only apply to California.
You may want to see if Oregon has similar statutes on the books.
Also there is a federal tax exemption on capital gains (profits) made on the sale of a primary residence. Currently it is for $250k of profit ($500K for married couples). Generally the states also follow these guidelines. To qualify you must have lived in the residence at least two of the last 5 years.
This is all just food for thought. I am in no way an expert or a financial advisor, so please verify all of this if you choose to go this route.
I made the move long before the Pandemic and have absolutely no regrets.
It took me a long time to find this affordable area to live. Prior to that, I was in much the same situation as you.
The best advice I can give you is to keep looking at other areas. Eventually, you may find one that works for you.
Good luck
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So Cal Joe –
Sounds like you made a good move at a good time. Yeah, I’m just considering things at the moment and thought people here might have some interesting things to say. Really, I’m not in a bad place, but if I can make a good move (in every sense), why not? I will probably spend some time perusing zillow. 😉
Thanks for taking the time.
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What a great thread. I am still in the “pay off debts” and “embrace owning my time” portion of the scavenging journey, and my hope is that my next few years will be filled with some much-needed exploring beyond the northeast. But there are a lot of interesting ideas in here for the future…
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Oh yeah, I have debts too. That’s one of the reasons I’m thinking about selling in this market. The catch is that you have to live somewhere; so, in the end, it will come down to numbers. At the very least, I’m trying to throw out ideas and maybe this can become a “reference thread” if enough people chime in. I’m interested to hear what people have to say and I don’t really mind what direction it goes. – cheers
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I’m glad to help.
Sometimes, I’ll run this type of search just to get a feel for what’s available.
These are active listings in the state of Oregon.
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For what it’s worth, this is the link to my original post started in 2018.
My biggest take away is the amount of encouragement and excellent advice I received from forum members regarding moving to and living in a rural community. For that I am appreciative and grateful.
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Usually life is cheaper in rural areas because there’s very little obvious culture, services, and “things to do”. We see people try to move to our area from the city and leave within a year because it’s “boring”. Stores are usually few (hail mighty Walmart), fast food might be the best places to eat, and everything shuts down by 6pm.
Rural living is what you make of it. Plenty to do if you’re willing to meet new people. Church dinners (even though we’re not church people). Miles of trails to explore. Cheap real estate to start your own business.
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I guess I didn’t mention that I’ve lived in the country before. I’ve lived in small towns and big cities, and a couple of other countries. I don’t need most of what big cities offer and I plan on traveling if all goes well.
Just for fun I looked to see what housing was going for in your neck of the woods. Like here, there doesn’t seem to be a whole lot for sale – and the prices are all over the map. Land definitely seems cheaper…Another idea I had was to get some land, park an RV or tiny house on it and build something – but, at least around here, good luck finding someone to build something…
I’ll just keep throwing out the random ideas I have as long as this thread continues, 😉
Like I mentioned, I’m really just in the thinking stage and fishing for good ideas and leads…
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Don’t move to Texas! Our property taxes are nuts! We just had property appraisals go up over 300% for the 3-year adjustment. One lot of land is appraised higher than we could actually sell it for! It’s crazy pricing! Our tax this year for our primary home was almost $8,000. And we’re so rural, we don’t have cell phone signal and our internet is a whopping 25 meg. Yep. MEG!
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They used to say here in Florida was one of the best places to go for cheap living but the last two years have put the final nail in that coffin. I live in the Sarasota area and 400k-500k is the price of admission now for a reasonable (not a dump) 3 bedroom house. Property taxes will set you back 3k-4k on that house and everything from car insurance to medical insurance costs more here than other parts of the country. I’d love to move to Tennessee, my in-laws live in Chattanooga and that area between Chattanooga and Knoxville seems to be pretty and affordable. Problem is, my wife works for country clubs and Florida is one of the best places in the country for that.
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Yeah, unfortunately the last few comments were along the lines of what I was expecting to hear…
I’ve just started thinking more seriously about moving, but, as of today, it’s really not the clear choice it was in the past. It’s looking less interesting to trade off what I have here for places that might save me a bit, but would be less desirable in almost every other way than here.
I haven’t given up hope or anything, but it seems pretty crazy everywhere. Even though it’s not great news in general, I’m still interested in hearing what people have to say.
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Dylan,
Bank of America says that a recession is coming:
https://www.reuters.com/world/us/global-markets-flows-urgent-2022-04-08/
Things will shake up during a recession. If you sell before the recession and travel. Then during the recession you should be able to snatch up a great deal where ever you choose.
Mark
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That’s part of my idea, yes. Though it’s not the main motivating factor. We live under capitalism, so there is always a recession/depression coming. Also part of that message from the researchers being “announced” in the press is political, because they don’t want the free money to stop – the money that has driven up the stock market and enriched corporate management as we’ve reached about 60%+ of americans who are poor and/or struggling to meet expenses. The two are intimately connected.
High finance and “economics” is harder and harder to get a grasp on. The former, on purpose, the latter, always the case – they don’t call it the dismal science for nothing. So, it’s pretty difficult to make predictions about anything – let alone housing prices; though, in the long term, since the 50’s, housing prices have risen, but it’s been a roller coaster…
It’s a long discussion though. For example, after the 2008/9 crisis, housing prices did indeed take a hit, but not only did they recover relatively quickly, they began to launch into the stratosphere. Interestingly, the decline (from historic highs) started before the crisis. These charts are very instructive:
Of course, it’s not a coincidence that the main drop happened after crimes in finance connected to real estate loans were exposed…Then the crisis was made much worse when banks freaked out and refused to lend to each other. No honor amongst thieves…But that’s another story…
Anyway, I guess what I’m getting at is I have no idea if there will be a recession while I’m traveling and looking for a place to buy (if I choose to do that) – but I do know there will be another recession/depression eventually, because that’s how capitalism works. When it does happen, we don’t know exactly how real estate prices will change, or for how long. With all of that being said, the current real estate market shows some signs of a classic bubble, so I can’t totally ignore that either.
Joe may have had similar ideas about a bubble when he moved. I think he said he moved sometime in 2018. If he stayed where he was, he probably would have made more money on paper, as of today…but he couldn’t have known that then, and he made the move he wanted to and seems pleased with his decision. I guess my situation is similar to his then, and I hope to be lucky enough to come out just as well. We shall see…
Hope some people found this interesting/educational.
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Dylan,
Recession or not, housing prices cannot keep going up like they are. At some point they are going to hit the ceiling and then a correction will come. I think we are getting close to that. The problem is that we don’t know when that correction will come and you can never time these things perfectly.
My idea is that if you sell before the end of the year or so and travel for a year or two, you are bound to find a good deal during a correction. Sell high this year, then scoop up and buy low when there is a correction.
Mark
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Hey Dylan,
Back in 2018 I sold my former house, primarily due to my own financial situation. I had been buying time, by spending down my retirement savings in an attempt to stay at my house by the beach.
When I determined to go to option “B”, I put the house up for sale. I’d been watching the market and knew prices were high. I didn’t know which way they would go next, but the safe move was to take the money and run.
I’ve run the numbers since them. My old home has appreciated at least 2 times the new one. However, when you look at the real numbers, the appreciation I would have realized, would not have been as great. There would have been capital gains taxes and the property tax base for my now house would have been higher. I’d also been using retirement funds to stay put. That involves taxes and penalties and that sheltered money would have been reduced if I’d remained.
Then there are the intangibles. The financial stress at that point would not have been fun. Buying, selling and moving during the pandemic would have been rough. Through dumb luck the perfect house (for me) became available at the perfect time for a great price. Also, last year, a large acreage adjacent to my present property was listed for sale and I bought it. These would not have been available if I waited.
Obviously luck was on my side.
There are a lot of factors pushing home values up. Demographics plays a large role in this. The numbers of millennials forming families and purchasing homes is huge. I don’t know that we’re going to see a crash again. The federal reserve seems to be determined to not let that happen. Even if there is a recession, don’t be surprised if other forms of mortgage forbearance crop up.
To sell now and sit it out, seems a bit risky to me.
You’re smart in doing the research ahead of time.
Good Luck.
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In our area, I don’t think they’ll be a housing crash. Many home buyers are baby boomers selling houses in DC for $600k+ and then purchasing in our area for $200-$300k, driving local home prices up.
Then there are outside investors snapping up properties and turning them into rentals. The properties are generating income.
So I don’t see a crash coming. Just leveling out. All the recent purchases are all solid. None of the “liars loans” you say in 2008.
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Thanks for sharing so much of your story Joe. I’m not at the retirement stage yet – and I have a lot of things to deal with before I can actually sell my house – but that is going to be another tricky situation. I’m trying to make the right moves now (that includes just staying put) so that transition is as easy as possible – if I can ever actually retire that is… The insanity of “the markets” and the world in general don’t make that a simple equation…
To be honest, I research things pretty well, so it’s hard for me to find help in forums and such, but I like to have these kinds of conversations. 1) because they can be interesting and enjoyable – hopefully for everyone involved 😉 and 2) i like to stay open to learning new things – and you never know when or where that will happen… -Cheers
P.S. To clarify, I have found help here about ebay, and that has been great.
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I found this article from Forbes which seems to support what Jay is saying. Key part is: “Why the Housing Market Will Likely Stay Hot. If you were hoping for a major downturn to snag a cheaper home, think again. Most housing experts are predicting the market to remain strong for a while for several reasons.”
https://www.forbes.com/advisor/mortgages/will-housing-market-crash/
Mark
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1) Get some funding from Japan’s SoftBank.
2) Sell those funds as mortgages- no credit check, no principal payment for two years, high rate of chargeable interest deferred for two years.
3) Bundle those mortgages together as “Collaterized Debt Obligations”, thus disguising the fact that they’re mortgages on undesirable property, taken out by a janitor in Detroit, who now owns <cough> six “houses”. Sell them as debts with an ostensibly low rate of default and an above-market return on capital…
4) …to some German bank, who are awash with spare cash from oligarchs.
5) Pay SoftBank back, so they can go invest in WeWork and Theranos.
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Yes Antique Frog, I imagine we’re essentially on the same page…
Not only have our corporate overlords not stopped investing in scams like wework and theranos, they’ve doubled down. Web3 is here…
Started watching the tv show about theranos. I won’t go a review, but it does paint a picture…
I think I might owe you a reply from a long time ago. I will have to look for that…
Around that time I had hoped to be a bit more active here, but life intervened in, well, to be vague, many extreme ways. I am again hoping to be able to spend a little more time here, but we’ll see…
For more big picture (and detailed) information about high finance, the housing crisis, and many other topics, I highly recommend this multi-part interview of Bill Black by Paul Jay:
Hope all is well in Dear Old Blighty – I mean personally, because we know all is not well otherwise… I won’t bother trying to find the pained expression trying to smile emoji, but you get the idea… 😉
– Cheers
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Hi Dylan, well our Prime Minister went to Kyiv a couple of days ago, but then he came back. Turns out the Chancellor of the Exchequer had a green card, as did his wife; they’ve been paying tax to the US government. Actually he avoided paying US tax by forgoing the extra money he would have been paid for being Chancellor on top of his parliamentary salary- kept him below the threshold. She’s an Indian with non-domiciled status here, so she only pays tax in India. He’s now started two inquiries, one to find out who told on him and the other to find out what he’s been up to. That’s after he compared himself to Will Smith defending his wife’s honour, i.e. he wants to slap the faces of the British public for casting aspersions.
Apologies, everybody, for the politics- but it’s Ruritanian politics.
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All hail Ruritania!
And Patel and her thugs are about to ok the extradition of Assange…
Of course the shit show of utter corruption and contempt you refer to is distracting most from the fleecing, which includes the continuing privatization of NHS, etc…
Oh man, it hurts…You do not want to end up like us…but, as the empire goes, so goes the rest of the world…
Ok, enough. I’m stopping myself. 😉
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Move out to the Kansas City area. We have tons of suburbs and rural areas within driving distance of the city. Home prices have skyrocketed, just like everywhere else, but most are in that $200K – $350K range.
The suburbs have loads of garage sales in the summer, estate sales in the winter, online auction companies with local pickup, live auctions, etc. Plenty of stuff to scavenge.
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Thanks for the rec Zach. I’m assuming you mean KS not MO…
Just did a quick look. Saw some cool craftsman houses. Things are cheaper there at the moment. Was hoping property taxes would be a bit lower – of course they were up until the last couple of years…
Yeah, everything is skyrocketing so fast it’s looking better and better to stay put, but I’m still looking, so everyone can feel free to keep the recs coming. The more the merrier.
What do you like about living there?
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Last year, my BIL was looking for a home. I suggested that he consider foreclosures, but he was looking for something very specific and went the normal route through an agent.
I have all these links that I researched for him. Perhaps you are already familiar with them, but I figured I’ll paste the links here. I can’t help from personal experience, but I do know that Ryanne and Jay purchased their home as a foreclosure.
Here are a few articles on how to buy foreclosed home.
https://www.zillow.com/foreclosures/buyer/finding-foreclosures/
Here is a site I found by search. I don’t know anything about it:
This site is associated with an HGTV program that covers cheap houses. You have to subscribe (and pay money) to get the full list. They pick out homes that are cheap but they feel have good value. I’ve never seen the program; just heard about it.
Here’s a couple of sites that I found just searching. I can’t vouch for them:
https://www.landville.com/The government sells homes that were financed in special programs, but the owners couldn’t pay the mortgage. At least, I think that is the premise. You would need to research and check through each of the sites on a regular basis:
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Thanks Sharyn –
Very nice of you to take the time. I’m not sure how comfortable I am with the foreclosure route, but I’m not ruling anything out.
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We stayed in a hotel this weekend which means we watch cable TV. On HGTV, every single show is about people buying and flipping homes. EVERY SINGLE SHOW.
I guess everyone’s a real estate investor now. I dont think they’ll be a crash, but it certainly feels like things are too hot and someone is going to be stuck with very expensive, mediocre properties.
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We are going to be moving after almost 15 years in Oakland. Buying still doesn’t make a lot of sense, for us (although in any other place, it would make total sense), but saving something like 40% on rent and getting more space by moving to a semi-rural area in Northern California.
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You can save some substantial money on rent by moving out of the immediate Bay Area. You have to be willing to go about an hour away and be careful where you move to (some suburbs here have the same problems we are trying to get away from– crime, etc). I’m too ashamed to even say what we pay in rent right now. Oregon used to be the place of choice for California emigrants, but now its Nevada and Texas. People are particularly aggrieved by state taxes in CA (10+%), and those states have none.
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workhorse –
Sounds like a minefield. Yeah, if OR isn’t the place of choice for Californians anymore, I’d hate to see what it would be like if it was…Like I said, we’re flooded with Californians. In the old days, people used to have bumper stickers that said, “Don’t Californicate Oregon.” Too late for that now. Not that I’m a hater per se. My family moved to OR from California when I was a tot, but that was more of a hippy invasion that, for the most part, made things better, e.g., healthier food, organic farming, music shows, cool little businesses, etc…It was also happening on a much smaller scale. The anti-Californian sentiment was real though and at first my mom had a hard time getting a job when they learned she was from California.
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