Random Thoughts

-Since I started using Twitter, it's been hard finding motivation to blog.
-I really want to buy a house now, but prices are still pretty high. I hope that C and I buy a place where we can cover the mortgage with only 1 of our incomes.
-Mortgage prices still seem to be very low. I used Zillow to get some mortgage quotes, and I can get around 4.5% (with some partial points, but we plan to keep whatever place we buy for a long time).
-New job is going well. I got my first paycheck last week. There is something to be said for getting paychecks, rather than direct deposit. I think that was the largest check in my name that I've ever received.
-I've held checks for $1+ million in relation to past jobs.
-Somehow I decided that I really like Pottery Barn. Not good for the wallet. Luckily I haven't completely lost my frugality and I'm searching craigslist for cheaper Pottery Barn stuff.
-I also bought a Pottery Barn gift card for about 75% of the value. I used it to purchase an floor model rug.
-I've been preparing a networth statement less and less frequently. The tanking of the markets gave me a good excuse to not prep one for a long long. I finally did one in mid-July and another one yesterday. In about 2 weeks, our retirement accounts went up 5% with no contribution from us. Go market!
-After preparing these recent net worth views, we realized that we are close to a pretty major milestone (cash savings of X amount, with X being a nice round number). If we save really aggressively, we could get to it, but I don't think we have the inclination to save that hard anymore.
-I believe in a 10% tithe, but I have been undertithing for the past 2 years or so. I didn't change my tithe to keep up with my income. Now an I over-tithing (only a little over) to make up for it.

The House

Ok, so here’s the house that we went and saw. Both C and I love the location and the fact that it’s a single family home. There are not a lot of houses in the areas of SF we would prefer to live in. The areas where we would love to live have a lot of condos and TICs (which seem to be a SF only phenomenon) I still do think prices are going down a bit, but not as significantly as before. Also, there are only so many single family houses in SF. Maybe I'm just trying to justify something that wouldn't be a wise financial decision, but I don't think it'll be a bad one since it will provide shelter and we would get a cash flow positive place if we rented it out. I'm pretty sure that it would be cashflow positive since we would put down a significant amount.

However, both C and I were under whelmed by the house. It is listed as a 4 bedroom with 1 bedroom on the bottom floor. That was fine, but then that room was used as a dining room because the dining table in the kitchen can only fit a small 2 person table. That left 3 bedrooms upstairs. The master bedroom was a good sized one, but the other 2 bedrooms were pretty small.

Originally when I saw the listing, I thought we could rent out the room on the bottom floor to a friend to make the cash flow even better (and affordable if I were to lose my job or want to go on an extended unpaid maternity leave). But the fact that renting out the bottom room would prevent us from having a place to consume meals and 2 of the 3 bedrooms upstairs were small made it not so attractive for us.

Anyways, there was no way we were going to pay anywhere close to the list price. We wanted about a 20% discount, but it’s not worth the effort since we’re ho-hum about house.

It’s very rare for a house to come on the market in this area. It’s even more rare for it to be somewhat in our price range. Here's hoping for a better house next time!

Thinking About Buying a House

C and I have been casually looking at buying a house ever since we've been married for the past two and a half years. I think now is the time to get serious with the $8,000 tax credit for first time home buyers.

I'm glad that we've waited this long to make a large purchase. We could have purchased a place earlier, but since we live in SF, housing here is expensive. We've been squirreling our money in liquid accounts since I never knew when we were going to get serious. We could have made a lot more money in CDs or bonds, but I've been lazy. We have enough for a down payment, now we just need to find a place we like that we can afford. We've waited so long to buy a place since we have not been able to find a place we like that we can afford. In the past I told C that I think there are non-monetary benefits to owning a home, but we just couldn't find a place that was right for us.

The upper limit of what we're willing to pay is probably $800K. I saw a great house that I liked listed for $1.08M. That is way out of our price range, but I was wondering . . .how low can an offer be without offending the sellers? There was just a price reduction and the place has been on the market for 6-8 weeks. C and I are planning on seeing it this weekend and then we'll know if we want to make an offer. There's still a lot more we need to do if we're going to be serious about buying a place, like getting pre-approved. I've been hesitant to do that so far since I don't think we'll start to seriously look until this summer.

1 Mistake I Made in Light of the Market and 1 Thing I Did Right

Well, everyone has been posting a lot about the economy. How can you not with the wild fluctuations going on? In light of what's going on, there is one thing I did that I can identify as a mistake and one thing I did that I can identify as a good decision.

My Mistake
The mistake I made was in not distributing my 401K contributions evenly across the year. Had I done so, I could have taken advantage of dollar cost averaging. Instead, I maxed out my contributions mid-September, meaning that my account is not going to be taking advantage of these new lower prices. I knew that I was going to max out in September but I decided to do so anyway since I thought it would be nice to have extra money for Christmas and potential year end vacations. I also thought I might be switching jobs so it would be easier if I maxed out my 401K at one employer rather than trying to figure out the exact amount I would need to contribute in my new employer without going over the maximum contribution limit. Now it looks like I won't be switching jobs in the near future. Since I work in financial services consulting, it just feels too unstable to be looking for something new. I'm also well respected in my current job and I enjoy it for the most part.

My Good Decision
The good decision I made was in deciding to hold our home down payment funds in cash. I began saving in earnest for a home about 3 years ago. It was always my intention to buy a place in 2007 or 2008. After getting married 2 years ago, my husband and I were able to significantly increase our down payment fund. It's pretty disheartening to see so much of your money only early 3% when the rest of your money is earning 7% or 10%. But we stuck to traditional wisdom and kept that money in an ING Savings account. I never even opened a CD since I was never really sure when we would find a house that we liked and pull the trigger on the purchase. Now I am so glad that we didn't risk that money since we want to use it in the short term.