So What Is It I Want? Not a Handbag!

The last few whirlwind weeks have been instructive. Teachers know that the last six weeks or so of a semester are a nightmare of exhaustion. Students start yelling at teachers (I had that happen yesterday). Seniors lose momentum and you have to keep them on track to graduate. Piles of papers teeter. Excuses and requests for extensions roll in. Meanwhile--we have been looking at houses. An hour away.

During this ordeal--which I hope will be oever soon, appraisal and inspection willing--I realized that my desires had shifted. No longer am I thinking about which handbag I should buy for my upcoming 60th birthday in January. No, I am thinking about how to help Frugal Son set up his house. And how to save some more so that we can similarly help Miss Em when the time comes (probably not for a while; she has a different trajectory of ambition).

There's nothing wrong with buying a nice handbag. Or anything really (though I hope I remain more attentive to the human and environmental cost of things). But I see that I get sucked into the consumer maelstrom as much as anyone--though I sometimes don't think I do.

The thing is: it's hard to figure out what you want! Really want.

A House for Frugal Son?

We put in a bid on a house that seems to answer Frugal Son's needs--old, rentable bedrooms, a bit shabby in the kitchen department--and the bid was accepted! I don't want to talk about this too much so as not to bring on the bad juju, so I will just say: an appraisal and an inspection await. Wish us luck.

Another New Orleans House

A week or so ago, I linked to two houses that were available. WERE is the operative word. Each had an offer--or several offers--within a day or so. They were beautifully done. There are many beautiful houses in New Orleans. The ones I most like--small, old, in nice areas--cost about $600,000. Oh well.

Since those first houses, we've looked at several others, all awful in one way or another. The market is so hot that people don't even make an effort to make the houses look nice in some cases. Like this one, which had an immediate offer and then was back on the market. We rushed to see it: the horror, the horror! Let's see: it has an asbestos roof, a squishy floor, a weird floor plan. The front is so cute!

Here's one on our radar.

Rough Housing Math

Since I last posted (yesterday), a few more promising houses have been listed and received offers. Oh well. The question at hand: how can Frugal Son--even with help from Mom and Dad--pay for a house? Here's my rough math: tell me what I'm neglecting to take into account.

Frugal Son is ALREADY paying $600/month for a tiny, shared apartment. He had to find an apartment PRONTO when he got a job. Still, he's in a nice neighborhood, so he wouldn't save much by moving to another apartment.

The realtor suggested that Mr FS and I--with our good credit--take out a mortgage and then SELL THE HOUSE to Frugal Son. We can get a lower rate.

Let's say the house is $300,000. Forget the downpayment. At current rates, the cost for a 30 year mortgage would be around $1200/month. Add about $400 for property tax and insurance...and we are up to $1600.

Frugal Son is currently paying $600 for half of a 600 square foot apartment. If he rented a bedroom in his house to a friend for the same $600, he would be on the hook for $1000.

1. Frugal Son said he could swing that, if necessary.
2. Frugal Son will be making more money soon, probably. He is working on his teaching certification.
3. We're committed to gifting Frugal Son the amount we saved for his education, which we didn't use, owing to massive scholarships. So, if we gifted him the $400/month difference between his current rent and the mortgage on his new abode, we could help him for AT LEAST 100 months.

Now people had these fantasy scenarios during the housing bubble with disastrous results. So to consider possible disasters.
1. Does Frugal Son need a roommate? Yes, but it's not absolutely essential, especially if his house is under $300,000 in the example.
2. Can we help out if roommie doesn't appear or work out? Yes.
3. What if Mr FS and I lose our jobs? We ARE tenured, but I've run some firecalc* scenarios, and we can survive a frugal retirement even if we were both fired.
4. What if Frugal Son loses HIS job? Well, he can make just as much by being a substitute teacher.

What is ALL OF THE ABOVE OCCUR SIMULTANEOUSLY? We have that education fund safety net.

*Firecalc: the best retirement simulator I've ever seen. Check it out!

Am I missing anything here?

Further Housing Bubble Notes: Open Houses

We went to two hastily-called Open Houses yesterday. Hastily-called because a house listed two days ago already had offers THE NEXT DAY. That was the little skinny shotgun house we liked. It looked just as nice in person. The neighborhood is--as they say--in transition.

Then, to make the unexpected drive right after work (car trunk loaded with papers to grade) worthwhile, we looked at another house, very very nicely renovated, also in an up-and-coming neighborhood. (See? I am learning the lingo). The house inside is nicer than in the pictures. Note the lovely garden behind. And see if you can figure out the layout. This was a classic New Orleans double shotgun that was made into a single. Our realtor thinks this will get competing offers and go higher than the asking price. Actually, he thinks the same of the first one.

I, of course, was totally enamored of both houses, even though they are very different. I think I have the thrift store buy-it-now mentality, which says, there's only ONE of this item! The broker told me to calm down (don't worry--it takes a lot to make the pathologically frugal sign on the dotted line. Not to mention Mr FS was there, smiling in an understanding way. When the broker tells you to calm down, you know you're getting a little crazy.)

Now we know--a teeny bit better--what is out there. You may ask: how can two English teachers think to help their in-transition son buy such $$$$$ houses? I ask too. I like numbers, but even I can hardly believe in this possibility. But the math works out. I will do some rough math tomorrow.

Beautiful New Orleans

Where even a young fellow, with a little backing from Mom and Dad, can consider a house like this.

Real Estate Bubble Part 2: Seems to be a Bubble

Duchesse wisely counseled in a comment: go to open houses. That would be great. So far, though, the houses that look intriguing are UNDER CONTRACT within a few days. Seriously. What open houses? For those of you who've been through a housing bubble: is this what a bubble looks like?

I can feel the bubble metabolism: HURRY! HURRY! BEFORE IT'S TOOOOOO LATE.

A New Housing Bubble? Or Is It Just Here?

I wrote a little while ago about helping Frugal Son buy a house. We are not experts on the process, having bought just one house. We still love the house, but--neophytes that we were--we were manipulated by everyone involved. A horrible experience, with many shady operators.

An acquaintance--the former head of the public library here--brought over her friend and neighbor, a very nice guy. I guess he will do as well as anyone. We haven't actually looked at anything. That is because the houses we are interested in seem to be selling in a matter of days. DAYS. So the agent calls the listing agent--and the house is already under contract.

Is this a new bubble brewing? Any advice on how to keep our heads would be much appreciated.