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It’s a running consensus in our family that we’re all getting pretty dissatisfied with the house we’re living in. The area is nice, but slowly going down-hill, and we’ve never gotten along well with any of the neighbors in over 10 years (talking to some friends a block in either direction, that seems to be a common thing in our subdivision). The older son is fine with moving, if we stay in the same school district, and the younger is constantly asking "When are we moving?"

The house we’re in now is not particularly small, but it is a bit crowded now that the boys are getting bigger. And with all the super houses dropping in price, and the up-coming incentives from the government (particularly the $7000 tax break for people that buy foreclosed houses in the proposed Housing Bill) it seems to be converging on a buyer’s Perfect Storm.

To that end, we’ve been looking around about half-seriously for a larger, better house. Larger would be at least one more bedroom (4) and hopefully a pretty big rec room. The ‘Better’ is more ambiguous. My wife has always wanted marble (or marble appearing) countertops in the kitchen, and a "kitchen island" like many of the newer homes have. I keep having cute flashbacks of cutting up vegetables on the island and ‘banishing’ the leftovers after they’ve been ‘voted off’ the island (yes, I’m a Survivor fan).

Myself, I’ve always wanted a rec room and a ‘real’ office to work in. Sometimes my work requires staying home, but since we only have three bedrooms, I’ve been banished to our (unfinished) basement. I’m about half convinced that my recent illness was exacerbated by the cold floors and dank air. An extra room in the house for my work would be ideal.

As for the rec room. I’ve had friends in high school that had large finished basements that we always hung out in; Watching TV, listening to music, playing games, etc. and I’d like something similar for myself and the family.

Let Loose the Dogs, The Hunt Begins!

Living in the mid-west, I’ve got a number of advantages on my side already.

• Low Cost of Living - I’ve read comparisons that say $100k here is the equivalent of $150-175k+ on either coast or most larger cities.
• Lots of Land - Getting an acre (or two) of land with the house is pretty much a given on a majority of houses. Finding something similar on the coasts or in a metro area either a) drives the costs up to the roof, or 2) comes with a stamp-sized piece of land.

There are some negatives of course, I live in the mid-west!!!

Seriously though, there’s no ocean view, the closest thing we have to skiing is an artificial ‘mountain’ (actually an oversized hill that wants to grow up to be a mountain someday) and our cultural area is kind of a mishmash of everything from hard-rock, to new-wave country. And of course, we’re very deep in the bible belt, which causes it’s own issues if one isn’t DEEPLY and PUBLICLY religious.

All in all though, I like where I’m at, given all those things. The thing I don’t like is EXACTLY where I’m at.

So, this weekend, as a family, we started wandering around various nearby areas and exploring what’s on the market. One of the REAL stars we happened to come across, but obviously have NO way of even HOPING to get into, was this one.

Price: $2,603,000

Bedrooms:  6

Full Baths:  6

Half Baths: 3

This magnificent estate property is situated on two lots, with rolling treed hills and breathtaking views. In-ground pool, Over 10,000 sq ft Two complete kitchens and two garages with a total of 9 garage car spaces. There are too many upgrades and bonus rooms to mention.

The point I’m trying to make (other than I drooled over this one until reality slapped me in the face. 6 bedrooms? 9 bathrooms??) is that you take this kind of house, with these amenities and find something equivalent on the east or west coasts, and you’re realistically talking $7-8 million dollars just as a lowball-offer. BTW, the above picture doesn’t do the house justice. It is Beautiferous when you drive by it.

This house is the HIGHEST priced house in a whole subdivision of similar (but admittedly smaller) houses that have almost HALF of them for sale. (Oh, and going to a different real estate web site, it’s listed at $2.5 mil. Already a $100k discount within a few days).

Now, Explaining the Temptation

I FIRMLY believe that things are going to get worse for the housing market, if not the economy itself, before it gets better. The new Housing Bill won’t go into effect for months. Next month one of the LARGEST number of sub-prime adjustable rate mortgages are coming up on their ‘adjustment dates’ in years, which I’m betting will trigger more foreclosures. The market is saturated with upwards of a year or more inventory of houses, and with the credit crunch, the price of gas and food going up and jobs starting to disappear through company layoffs and cutbacks, people are spending a lot less than they were before.

This all adds up to an even worse future for those McMansion owners that didn’t put away for the rainy day. If I’m right, the rains they’ve seen recently are just a light shower compared to what is on the horizon.

So, why jump in?? Having said that, other than recently, REAL ESTATE HAS ALWAYS BEEN A GOOD INVESTMENT. The sub-prime bubble has scared a lot of people about real estate, but historically, it has always done well overall. We’re in a position of re-adjustment, but even with a 50% reduction in some areas, it will only bring it in line with where it would have been before the whole debacle started. They aren’t making any more land, and if you can weather the bad times, the good times can get pretty good.

Mostly this is idle hunting right now. We’re killing the debt first, so the increased credit requirements won’t catch us, and we’re going to fix up this house to sell (a daunting task on multiple fronts). We’re not exactly in a huge hurry to move, so we can take our time and find a good deal. I’m betting the market downswing doesn’t bottom out until sometime in 2009, at which time we should be ready to make our jump, if we find somewhere to jump to.

So, it’s time to ask the readers: Do you think I’m crazy (and if so, why?) or do you think I should make the jump next year? I’m interested in hearing your take on buying up in this market.

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