Not only did they lower my taxes, they refunded the portion of taxes that I had already paid. So now according to the county I have overpaid for property taxes. I knew of this, and submitted paperwork for it. I did this about a month ago then promptly forgot about Hey it’s the local government; they work about as fast as a smart car merging on the interstate, so I was not expecting much.

Long story short I got a big check today from the country auditor today, that guy is totally getting my vote.

Checks: Love getting them, hate to write them.

            It can be seen in this graph that indeed all real estate is local. A house that was purchased in Cleveland during the peak would still be worth about what you paid. Verses a market like Las Vegas where you home might be worth 70% or even half as much as you paid in 2005.

            Now the question is will this trend continue, or do we still have a ways to go. The government is keeping mortgages rates artificially low as well as paying people like myself $8,000 to buy a house. They are hoping things will pick back up so that these costly temporary measures can be phased out.

            My thought is if you can swing the mortgage payments, and are planning on staying several years I don’t think you will ever find a better price with a better rate. “Timing” the market is always a crap shoot at best, but buying now clearly is a much better idea then buying 3 years ago!

Population: JonBon

            I used to be rich, I used to be the guy with money. I used to be the person who took vacations and maxed out their Roth IRA.  I used to live in a vault like Scrouge McDuck and swim around in all my money.

But I moved.

I moved into the poor house, with most of my fellow Americans. Now you have to understand my definition of poor, and an economists definition of poor are very different. My net worth is still probably very high for my age, and technically I am doing great. I am just way less liquid then I used to be.

            I have accumulated a crazy about of debt in the past 3 months or so. Now most of this is good debt, but its still debt, and I hate debt!!

            House:

 I purchased a home with 10% down. So I have six figures of mortgage debt that I now have to pay back for 30 years at 5.45 percent.  It is a huge adjustment to have tens of thousands sitting in the bank, to tens of thousands sitting in a house. It makes the dollars a little harder to get too. I will get the $8,000 first time home buyers credit, and I will get a place to live, but it’s still hard to go from owing money to no one, to owing the bank well over $100,000! The reason that this debt is good, is becuase it went to purchase an asset that in theory can be sold for more then I paid.

            Appliances:

I spent around two grand on some pretty solid stainless steel appliances. I am happy with what I have; they look nice, and work well. These I financed over a year with 0% interest. I did this before with my enormous TV. It’s a way to keep your cash, and pay for them over time. Just a warning, do not miss a single payment, and never be late. The banks that make these uncollateralized loans (GE Money) are not very nice people. The 0% you get it just a teaser, most people do not pay them off in time, and get hit with huge penalties and interest.

            Jewelry:

I recently got engaged and financed an expensive diamond, as well as purchased a ring to put it in. I probably spent a lot more then I needed too, and got a diamond that is of much higher quality then most. She would have been happier with less, but its what I wanted her to have. I financed the ring with a zero percent interest for 12 months Chase credit card. Again a warning to you, this is a really stupid way to buy things unless you know that you can make the payments.

            For years buyers and sellers have relied heavily on realtors to move real estate.  No one tried the infamous FSBO it was usually viewed as the Hail Mary pass of selling a property. Realtors provided advice, guidance, and were just a good sounding board for nervous and inexperienced buyers.  In return for all this legwork, handholding, and research realtors took a hefty sum of 6% of the purchase price. Often this was split with the Sellers realtor as well.

            My personal favorite thing about real estate agents is the silly photo that every single one of them has. They are so similar they all must use the same photographer. I don’t know how they all look alike! The picture looks like the cross between their senior picture and a glamour shot.

            Well then this small little invention came along: The Internet.  I don’t know if you have heard of it, it involves signing onto this thing called AOL, and then getting  a busy signal about 43 times then on the 44^th time you can go to chat rooms, and send funny emails.  

            So I am buying my house without a realtor. I found it on my own, I researched it on my own, and I made the offer on my own. I will be closing soon.

            One of two things is going to happen: 1 I will buy this house without a realtor, save a bucket of money, and consider myself a genesis, OR Screw up the closing royally and consider myself a huge dumbass.

Time will tell.

Sike, mine’s a little smaller

            I have not posted in a while, but this is a pretty major event in my life. You only get one first house, much like you only get one first car or first high school sweetheart.

            I am not trying to time the market; I really just need a place to live. I had been renting for a while and was a little tired of moving every 6-12 months, parking outside, and being at the mercy of landlords.  So I found a house that I liked,  was priced well for the area and made an offer. The owner of course countered, I agreed to the counter with a few small changes, and we have a contract to purchase.

            The house itself is smaller, and not the prettiest or largest on the block; which is usually a good thing. It has three bedrooms, a garage to tinker in, and a full basement that I will convert into a man-cave as soon as I can afford it.

            Speaking of affording it this is a huge change for me. I was sitting on a huge pile of cash (for me) and I now have to spend practically all of it on the down payment and closing costs. So overnight I went from a huge cushion to practically none. This is definitely an adjustment in thinking and in living. Good thing the government is giving me $8,000 to purchase this home; hopefully I will be able to claim it on my 2008 taxes.

More to come later.

            This is a graph that was created by data that is published by Case-Shiller on a monthly basis. The numbers are normalized so that they both have the same starting point. The graph clearly shows the massive run-up and burst in housing prices in ONLY certain areas. Places like Cleveland that never had the huge bubble in the first place are simply “adjusting” to their fair market value, not “crashing” like many of the previously HOT markets.

What I get from this graph is that when these lines drop near to or below the 100 line it would be time to jump back in.

But I could be wrong! Your guess is as good as mine.