Saturday, June 20, 2020

Look Before You Leap!

Moving in a panic might not be such a good idea.

After 9/11 things got weird in Washington, DC.   There was a smoking hole in the side of the Pentagon, and no, it wasn't  a "missile" but a commercial aircraft - thousands upon thousands of commuters on I-395 saw this happen, so 9/11 "truthers" please go fuck yourselves.  With a stick.  A sharpened stick.

They closed the airport - no airplane noise for a week, except for the sound of fighter jets.  It was weird - about as weird as this virus thing.   Then we had the Anthrax scare - someone mailed anthrax to Congress.  They had to shut down a postal distribution center.  People died.  It was awful.

And to make things worse, some idiot decided to go around shooting people for no reason whatsoever - the "beltway sniper" shot people at gas stations and the Home Depot.  An opportunistic Police Chief took charge and screwed up the investigation, delaying the arrest of the perpetrators by nearly a month - by which time they had killed even more people.   Chief Doofus then writes a book about the whole thing, making himself out to be a hero.

We spent a lot of time in Florida around that time.  Flights were cheap (no one wanted to fly - sound familiar?) and we were able to buy some condos for cheap as well, and rent them out when we weren't there.   The real estate market went bonkers, and we sold out when a developer offered us $700,000 for our run-down two-bedroom home, so he could tear it down and put up two mini-mansions.  We escaped from Fairfax County.

We also sold the condos - again, people knocking on our door and asking us to sell at nearly twice the price we paid for them only a few years before.  So we did, and bought the house on Jekyll Island.

But where to move?  Before we settled in Georgia, we made the mistake - yes a mistake - of buying a house in Central New York.  I was from the area and we enjoyed vacationing there.  For two weeks a year, after mosquito season and before black fly season, the weather is pleasant and most of the snow has melted.   What we didn't realize (and what I had forgotten) was why people leave that State - the high taxes and low expectations.   Places to go on vacation are not always places you want to live.  Key West is fun, but if you want to ruin your vacation, read about the insane local politics in the paper, or look at the Real Estate section.  Just enjoy it and leave - you'll notice few of the people who actually live there are all that happy.

In recent weeks, there has been a movement by some folks to move away from the city.  I can understand this - we had the same feeling after 9/11.   We had made our fortune (so to speak) in the big city and maybe it was time to move on.   You go to the city to seek your fortune - sometimes it is a good idea to leave the city to spend it.   But you need to think carefully about where to go, lest you end up somewhere you are not happy.

We had fun in Central New York, but the costs were pretty staggering.  We never bothered to think about the cost of owning a home there, much less the cost of having two homes, which turned out to be enormous.   Yes, prior to that, we owned several properties, but all but one (our home) was rented out and made a profit for us.  We went from that model to having two homes, both of which were just expenses that never generated any income.   And the house in New York had a staggering tax bill, not to mention maintenance and repair costs.

Was it fun?  Well, yea, for a while - having two homes, boats, cars, and lots of time to explore and visit wineries and whatnot.   But in retrospect, we could have done this with less home, or rented out portions of the property - or all of it when we weren't there - and made money and lived for free, basically.   It was an expensive lesson.

I see people doing the same thing today.  Spooked by the virus, they are buying properties in outlying areas willy-nilly, often paying asking price or getting into bidding wars, and then throwing a hundred grand - or two - at remodeling.  The problem is, of course, if you pay the $500,000 asking price for a house, it is basically worth $500,000.   Throw $200,000 into it, and it ain't worth $700,000 - maybe $550,000 to $600,000.  So you are throwing away money by rushing into a purchase.  And that is what happened to us in New York, and what is happening today.  I saw a fellow plow a million bucks into a house in a $400,000 neighborhood.   He has a long wait before he gets his money back.

We are seeing this here on our island, which makes us wonder whether we should be selling.   The Island is changing - more people, and more younger folks from the city, who drive fast, talk fast, and are impatient and have a sense of entitlement.  Karens and Kevins, or as we call them, "Fuckheads from Buckhead" (Buckhead is a pretentious suburb of Atlanta).   Maybe it is time we moved, too.

Or maybe not.  Look before you leap.  Think carefully about where you want to end up, because moving to the wrong place can be an expensive mistake.  And moving because of transient conditions (a virus) may be short-sighted.   One couple, profiled in the Atlantic piece above, claimed they were going to move to the Berkshires to raise chickens.  Sounds idyllic and all, until you realize the price of a dozen eggs these days is less than two bucks, and land in the Berkshires ain't cheap by a long-shot.   I learned the hard way that life outside "the big city" isn't that much cheaper than in it - and in tax-rich New York and New England, there may in fact be no savings at all.

It is funny, but despite the higher cost of living, a lot of stuff in the big city is cheaper than in the country.  Want to buy a car?  There are plenty of dealers competing for your business, as well as the hundreds of thousands of individuals selling their own cars.  In the country?  You have to hope Old Clem has the car you want at his tiny dealership, or buy your neighbor's clapped-out Jaguar or his Geo Metro.  All that shit on Green Acres was based on real life.  And I hated that show, too.

If you are looking for a job, well, the city has them, hands down, while in the country, you have to hope the one place that is hiring people with your credentials will hire you.   Life in the country is fun - once in a while on vacation.  But it is not a very productive place to live.

So we sold the vacation home.  It was fun, but in retrospect, we should have rented a place, or at most, bought the small cottage we were looking at - as opposed to the large house and acreage.  It was fun, but it was expensive fun.  We should have looked before we leapt!

Panic buying and panic selling never end up being good bargains.