As we've already established, the husband and I live in Cake Eater Land. While we love the houses around here, we could never afford one of these monsters. They're gorgeous, but they're pricey. Yet that doesn't stop us from having some good fun while we walk around the neighborhood every evening, looking to see which houses sell and which ones haven't. We also have a good time trying to estimate how much people took out in home equity loans for some monstrous additions some homeowners in the neighborhood have added. It's sport for us. And there's the added incentive to paying attention in that if the real estate market takes a big fat dive, (and we win the smallest powerball lottery) we'll finally be able to afford one of these homes. Right now we would have to win a $20mil jackpot to even be able to afford it.
So, I have to say that I fully agree with Jonathan's hopes/dreams/assessment of the real estate market in this post.
Go read the whole thing.
Now, I understand about supply and demand, but there is no way any of the houses in my neighborhood should be priced at two million plus. Don't get me wrong, it's a great neighborhood. We have good public schools, great wide, streets that are actually plowed in the winter (which, quite frequently, doesn't happen in a certain city coughcoughMinneapoliscoughcough), and a city government which takes good care of the taxpayer. A five bedroom, four bathroom, brick house with ivy crawling along the outer walls may be wonderful. And it may be equally wonderful that it's in a neighborhood with established trees, but when it's on a lot the size of a postage stamp there's NO WAY IN HELL it should be priced that high.
It seems the market here in the Twin Cities is at least coming back down to reasonable levels. That brick house I mentioned up there is not a hypothetical house: it was just for sale in the neighborhood. And it came off the market after what the husband and I assume was a two-month contract with the realtor expired. There are any number of large houses just like it in the neighborhood, that were priced comparatively, that haven't sold, either. In fact, even if you're in the market for a fixer-upper, there's a nice four bedroom colonial in the neighborhood for sale. It has gorgeous, if a wee bit dark, antique walnut paneling in the living room; a formal dining room with a built-in clam-shell shelves in one corner and gorgeous woodwork; and two fireplaces attached to a central chimney. It also has a plumbing system that's all galvanized steel; a roof that looks like it would come off entirely if there was a gust of wind over twenty mph; an electrical system that's only at 60W; rotting clapboards that haven't been painted in years; and a kitchen that would serve the needs of a hobbitt quite well. This house is, reportedly, a bargain at $799,999. The realtor, when we chatted him up and conned him into letting us take a peek at the thing whilst we were on our walk, admitted flat out that it needed work and that it would take about $300K to get it up to snuff. But, really, even then it's a bargain! Well, no, it's not and the fact that it's been sitting there for two weeks---which would have been unheard of a couple of years ago---is not at all surprising. No one wants to spend that kind of money on a fixer-upper right now. Money is not as cheap as it was a few years ago, and the real estate agents have, apparently, yet to figure this one out. As far as we can tell, just from observing, the real estate market here in this part of town is going tits up. And, considering it was never the most reasonably priced neighborhood to begin with, this doesn't bode well for all the people who went debt crazy over the past few years, and---Good God---there were quite a few of those people in this neighborhood. Contractors have made a fortune fixing things up around here. Huge additions, new garages, new wrought-iron fences, new landscaping, new kitchens...you name it, something's been done to the majority of the houses in this neighborhood. I've long thought that people were borrowing too much money here in Cake Eater Land to keep up with the Joneses---we'll just have to see how it all turns out.
Because even if it doesn't help us to live where we want to live, well, it's at least fun to watch.
UPDATE: The discussion continues.
Posted by Kathy at August 29, 2005 03:55 PM | TrackBack