patrick.net

Probably a nice 3-bdm detached SFR in Washington or Oregon on a decent sixed lot. Something close to a medium-sized city (for shopping/convenience), but not too close. Something close to a lake or the Pacific would be nice, but not essential.

@HARM,
have you checked out W. of Seattle? There's a few nice (and quieter) port communities out in Kitsap county, still within a ferry ride to downtown. I'm also considering Bainbridge if the market drops enough.

Prat, SactoQt, there will be bubbles so long as there is greed, fear, and assets.

Information is supposed to make markets more efficient. Yet streaming real-time stock quotes did not prevent the last bubble. I guess human emotion can only be that efficient.

Some are now saying that we are experiencing an oil bubble

Well, with dinosaurs being extinct, they are not making any more oil. ;)

Oil production is somewhat limited, yet demand is steadily increasing. With peak oil looming, I will not be surprised to see $100+ oil. That said, if the world is heading to a severe recession, the inevitable may be delayed.

So... we are doomed anyway... unless we play the cards right. Let's play the cards right.

Forgot to mention the financing. Hmmm… let’s see… gosh, there are just so many different financing options today. Decisions, decisions… which NAAVLP(TM) should I get?

I would probably go for a 30YR FRM with 20% downpayment. However, I will try to make monthly prepayments to emulate a 15YR amortization whenever possible. Why not a 15YR FRM instead? I need flexibility. I need options. Just not an Option ARM NAAVLP.

Oil price does not appear to retreat significantly after the announcement regarding the release of strategic petroleum reserve.

Kurt S - Thanks for the info.
Bainbridge Island sounds very nice. Telecommuting vs. commuting sounds even better to me. Noticed it was ranked #2 on CNN-Money's "Best places to Live" 2005 survey. Median price is a bit steep ($430,417), so yeah, I'd wait a little while before taking the plunge.

Also loved how WA has no state income tax, while it's sales tax is just BARELY higher than California's (8.6% vs. 8.25%). And despite that, they (unlike us) manage to have well maintained infrastructure and good schools. Amazing what you can have when you're taxpayers aren't carrying half the third world on their backs, eh?

your taxpayers -- need to grammar check before I hit "submit"

Amazing what you can have when you’re taxpayers aren’t carrying half the third world on their backs, eh?

Also, I think Washington is more conservative and pro-business then California. Sometimes, being "liberal" does no good at all.

Our current plan will have us buying in 4.5 years, regardless of economics (but this timeline is dependent on the dh getting promoted, and we won't know that until this winter). If that works out, we should have enough saved by then to buy the house we'll raise our kids in with a smallish 15-year fixed-rate loan.

Or if we end up living in a really affordable area, we could probably get by with no loan at all. :-) I understand the value of keeping the money invested, and who knows, we'll probably do that if it makes sense at the time (and interest rates are not sky-high), but I will want the peace of mind to know that we can pay off the house at any time should the need arise.

If this plan doesn't work out, we could find ourselves needing to buy a house as soon as next summer. In that case, we'll need a bigger loan, and probably 20 or 30-yr fixed rate. Unless it's in a bubbly area, and then I guess we'd rent until it makes sense to buy (rent v. mortgage cost).

The dh will look for a job in the BA, but we'll have to be open to wherever he gets a job offer, be it in CA or elsewhere.

Peter P, we've gotten that same advice repeatedly about "buy a starter house and move up later." It's interesting to me though that this advice always comes from people who have become unintentionally stuck in their "starter" houses for decades or people who lost money on their homes during the 90s CA bubble and now live in second or third homes that are still basically starter homes.

Peter P, we’ve gotten that same advice repeatedly about “buy a starter house and move up later.” It’s interesting to me though that this advice always comes from people who have become unintentionally stuck in their “starter” houses for decades or people who lost money on their homes during the 90s CA bubble and now live in second or third homes that are still basically starter homes.

Jamie, I get this advise from semi-sucessful (so far) real estate "inves-culators". However, the big underlying assumption of this strategy is exceptional appreciation in the next few years. This assumption is usually valid in California in the past. Now, it is a very dangerous one to make.

Wow, Greg --and people think I'm pessimistic!

Regarding bubbles, I would guess that the internet has helped produce large bubbles for two reasons:

1) There is a huge disparity between those with lots of information at their fingertips and those with little or no information, creating a series of unfair sales. When a seller is equipped with more information than their buyers, this will help to create a sellers' market.

2) (and this is the big one) The internet has also helped make entry into highly complicated forms of investment readily available to most consumers. 30 years ago, very few people bought and sold stocks because it was more expense (you had to go through a broker, so trading costs were much higher). Housing loans can be approved online in less than a minute, and people can shop for mortgages online. This helps to create a sense of speculation, and creates an arena for predatory lending and speculative scams.

And despite that, they (unlike us) manage to have well maintained infrastructure and good schools. Amazing what you can have when you’re taxpayers aren’t carrying half the third world on their backs, eh?

I also noted this during my last visit. The roads were far better than where I live (Marin) I was thinking...WTF...why can't we do that in CA?
Yes--there are migrant workers in CA, but there's also in WA too. And, from what I've read, our ag economy is dependent on a migrant laborforce to keep produce affordable--do you think many US citizens would do that work? But, I digress; I don't intend to get that started...

Peter P

Re: oil bubble
I don't know if there is an oil bubble or one in the making, I just know that some economists say there is. According to what I've read, it was predicted by some when we were in our last oil crunch in the 70's that oil would be trading at $90 a barrel by 1990. It's 15 years later and $70 is considered very high. Now where we go from here is anyone's guess, but since the price is being driven in large part by speculation on futures it's not out of the realm of possibilty to suggest we could be looking at an oil bubble in the making. I would simply keep that in mind when investing in oil and remember that the oil market can correct just like the RE market.

SactoQt, the speculation in oil futures is in a very small scale. The futures market is tiny. The reals speculations that we should look at are large deals like China buying up oil assets and building up oil reserve.

In the 70's, price shocks were caused by artificial factors (e.g. embargo). Now, the peak oil theory predicts that production will drop during rapidly increasing. The shortage is "more" real.

That said, I am not going to over-leverage on oil. The short-term retreats can be lethal.

I would simply keep that in mind when investing in oil and remember that the oil market can correct just like the RE market.

Oil can be traded literally at the push of a button with real-time streaming data. It can correct much more quickly than the RE market. It is also a 24x5 market, if one choose to stay up and traede. ;)

Yes–there are migrant workers in CA, but there’s also in WA too. And, from what I’ve read, our ag economy is dependent on a migrant laborforce to keep produce affordable–do you think many US citizens would do that work? But, I digress; I don’t intend to get that started…

Oh, no let's get started on that.... ;-)
Yes, out agribusiness (and construction and garment and hotel) industry is now dependent on migrant labor. Mainly because they've deliberately engineered it that way (i.e., use sub-minimum wage illegals to drive out Americans and small domestic businesses as well).

Of course if the kind-hearted executives running these agribusiness/hotel/construction behemoths really had the immigrants' best interests at heart, they would encourage immigration law reform to allow more of them to come here legally. But that would require them to pay at least minimum wage and EVEN WORSE abide by labor laws, withhold FICA, provide sick/vacation pay, possibly provide worker's comp & medical insurance, and even *gasp* allow workers to unionize.

GOD FORBID IT!!

In the 70’s, price shocks were caused by artificial factors (e.g. embargo). Now, the peak oil theory predicts that production will drop during rapidly increasing. The shortage is “more” real.

My husband has been getting a lot more literature through work that says this is not true. They say the reserves are bigger than reported. Again, I don't know what is or isn't true, but there are those who are very vocal in saying don't buy into hype over oil prices. I am not currently worried about an oil bubble, but if we do start trading at $100 a barrel then I would say we're definately in a bubble.

Prock,

I've visited Seattle & surrounding areas quite a few times, though I haven't lived there and can't speak authoritatively. Even so, based on my limited experience/knowledgee, I think you're far better off on just about all scores. Of course, no area is perfect or problem-free.

We just voted to build a monorail, and now we’re taking away funding. People are constantly wrangling over light rail (we don’t have anything like California’s rail system), and traffic is a mother-f—ing nightmare.

Ummm... you know where just about ALL of the nation's most congested freeways/roads are? As far as that wonderful light rail system goes, what we have (BART-NCAL, MetroRail-SCAL) is not adequate for our population needs and traffic problems, but, yes, it's better than nothing.

The city plans to toss about 15 billion (American, that is) down a tunnel to replace a crumbling viaduct.

Wow! You actually SPEND taxpayer money on infrastructure there?? I'm impressed...

Our school system is routinely a few billion over budget, and teachers are constantly striking or threatening to because our half-million dollar $hitboxes (not to be compared with your million-dollar $hitboxes) are still out of their reach.

Try routinely tens of billion over budget here. And as you pointed out, housing's still more affordable --or more accurately-- less unaffordable up there.

Also, I don’t want anyone else moving here and screwing up my commute.

Sorry, Prock, I'm coming ASAP. Maybe you can sponsor an anti-Californian immigrant ballot initiative to keep us out or something. :mrgreen:

My husband has been getting a lot more literature through work that says this is not true. They say the reserves are bigger than reported.

I read that production quotas are based on the estimated oil reserve in each OPEC member country, so there is definite incentive to over-report the amount of reserve.

Again, I am not an expert in oil or pretty much anything. I can have a chat with a friend of mine who is an energy analyst.

HARM, why not Vancouver, BC? It is just 3 hours away from Seattle and it has slightly less rainy days per year. It has many good, cheap restaurants and health care is (so far) taken care of.

Again, I am not an expert in oil or pretty much anything. I can have a chat with a friend of mine who is an energy analyst.

That sound like an excellent idea. Nothing like an expert opinion.

Yes, out agribusiness (and construction and garment and hotel) industry is now dependent on migrant labor. Mainly because they’ve deliberately engineered it that way (i.e., use sub-minimum wage illegals to drive out Americans and small domestic businesses as well).

Well...I don't claim to know much about ag, but I do recall a trend moving towards large farms vs. the traditional family farm, which incidentally got my family out of farming altogether; it was no longer competitive. The same holds true for parts of europe, but there govts. heavily subsidize many traditional farmers to "continue the cultural tradition". I suppose the question still persists: how many Americans would be happy with agricultural jobs, and could they be paid "fair wages"? California has a huge ag economy, and currently I'd have to wonder if American farm workers could ever afford a house--it's hard enough for "highly paid professionals". Sigh.
While I like cheap produce, I think our current migrant population should also be given a worker's permit and enter the labor pool legitimately. This talk of "closing borders", while industry hires illegals strikes me as very hypocritical.

I seriously considered Vancouver, BC a few years back. The wife and I went up there on vacation, and liked it so much, we actually met with an immigration attorney. He told us to stay the hell out of Canada --we'd just drive down wages and overload their health, transportation and education infrastructure. Plus we don't speak Canadian.

HAHAHA, just kidding...

Really, he said (at the time) that based on our employment histories, we'd have a tough time qualifying, based on Canada's point system. Haven't looked into it recently, though.

Really, he said (at the time) that based on our employment histories, we’d have a tough time qualifying, based on Canada’s point system. Haven’t looked into it recently, though.

I am very surprised. I thought they have a very liberal immigration system.

BTW, I consider Vancouver the best city I have ever visited. You need to create your own job though.

While I like cheap produce, I think our current migrant population should also be given a worker’s permit and enter the labor pool legitimately.

I have mixed feelings about that idea Kurt. It may be inevitavle, given the current situation, but I don't like the message it sends (i.e., reward current law-breakers and you get even more). Recall Reagan's general amnesty of the 1980's. With the promise being, we'll ok these guys for now, but from now on, we're enforcing the border! Yeah... that worked out REAL well.

However, I am not against increasing the amount of Visas/work permits and increasing LEGAL immigration quotas --or abolishing them altogether. I am sure THAT will never happen, though, because most of the affected industries do NOT want legal immigrants in those jobs earning living wages and benefits or under protection of U.S. laws & unions.

This talk of “closing borders”, while industry hires illegals strikes me as very hypocritical.

Yes. Very hypocritical of industry.

I am very surprised. I thought they have a very liberal immigration system.

It all depends on where you're from. If your from a non-democratic country, such as China, you get automatic political asylum the second your foot touches Canadian soil. If you're from the U.S., Europe, Australia, etc., you need to have enough points and go through their residency system --not all that different from the U.S. really. That's how he explained it to me back then anyways...

While I like cheap produce, I think our current migrant population should also be given a worker’s permit and enter the labor pool legitimately.

I do not mind paying more for stuff so long as the law is enforced and inflation is truthfully reflected in the CPI.

One of my Mom's best friends lives right on the Ca/Mex border and her family has lived and farmed the area for generations. It is basically considered normal to hire illegals. It's come to the point where the farmers can't pay a higher wage and remain competetive when all the other farmers have a work force of illegals, so they all end up doing it. It's so accepted that the families in the area all have maids/nannies etc. who are illegals and no one thinks anything of it.

you need to have enough points and go through their residency system

I think they also have investment-based immigration. If you have cash-sitting around waiting for the bubble to burst it may not be a bad idea... ;)

I do not mind paying more for stuff so long as the law is enforced and inflation is truthfully reflected in the CPI.

Ditto. Same goes for gas prices too. If $6/gallon is what it takes to end this country's addiction to cheap Middle East oil and start developing alternative energy technology, I say bring it on.

Ditto. Same goes for gas prices too. If $6/gallon is what it takes to end this country’s addiction to cheap Middle East oil and start developing alternative energy technology, I say bring it on.

Yes, $10 gas? So be it! It is time for alternative energy and sustainable lifestyle. Perhaps I should move to within 2-miles of work. Good to have renter's flexibility. ;)

SactoQt,

It's sad to see what happens to society when the laws are routinely not enforced and everyone loses all respect for them as a result. And when people are basically forced to break it in order to remain "competitive". It's all about our "race to the bottom".

Of course, we could raise or abolish immigration quotas, so all this off-the-books business gets taxed and the workers can earn decent wages, but... OMG!! That's so anti-business of me! Must read National Review/WSJ and purge such Commie thought from my head right away...

Ditto. Same goes for gas prices too. If $6/gallon is what it takes to end this country’s addiction to cheap Middle East oil and start developing alternative energy technology, I say bring it on.

Wouldn't that have more far-reaching consequences than mere transportation/energy issues? I'm thinking in terms of all those products derived from petroleum; any suitable replacements out there for plastics, etc? It seems our consumption-based "economy" is catching up with us.

Harm

It's interesting because right now it is so 'way of life' there. Not only do the residents think its fine but so do the illegals because most of them send most of the money back home to the rest of the family. Slave wages here are still better than what they can get in Mex so as far as they're concerned it's fine. I don't know if change will be possible if everyone is happy with the status quo.

Wouldn’t that have more far-reaching consequences than mere transportation/energy issues? I’m thinking in terms of all those products derived from petroleum; any suitable replacements out there for plastics, etc? It seems our consumption-based “economy” is catching up with us.

Good point. I think biofuel research holds a lot of promise (no, I don't mean corn-based ethanol, which btw uses more energy to make than it "produces"). You can actually get most diesel engines to run on cooking oil --amazing but true: tinyurl.com/bcjsq Not sure if you can generate plastics from it though.

Kurt has a good point. All that plastic crap we get from China is gonna cost a fortune! And it'll cost more than twice as much to build it (since their industry is using woefully inefficient energy), and more than twice as much to ship it here. This means less buying from the American public (whose wages are shrinking and whose cheap debt is vanishing), which means bad times ahead for Chinese manufacturing. This could mean the return of manufacturing jobs to the US. The debt bubble and peak oil will cause massive changes worldwide.

Still, I bet Great Depression II will be blamed on Hurricane Katrina and the billions of dollars of damage it's done, just like the last Recession was blamed on 9/11.

I don’t know if change will be possible if everyone is happy with the status quo.

If by "everyone" you mean rich people and big business, then yes. I haven't met too many taxpaying middle or working class people of any ethnicity who are too thrilled about the status quo. Of course, we "don't count" in such a high-stakes political game, do we ;-).