Tuesday, August 9, 2011

Seemed like a good idea at the time.

In early February 2006, we bought a cute little house on the Salem/Lynn line, 11 miles North of Boston.  It is a mile from the commuter rail for an easy commute to downtown.  There's an express bus stop 100 yards from our front door, also an easy commute to downtown.  It's just over a mile to the beach and boardwalk.  It was a two bedroom/1.5 bath with an unfinished attic and a full basement.  There's a relatively large (for the area) fenced backyard and a small garage and four spots to park in the driveway.  It was in desperate need of updating, and the unfinished attic was the perfect canvas for Ryan to design and build our dream master bedroom and bathroom suite with a large walk in closet and plenty of built-in storage.  The only draw-back was the school system and the busy street, but since we'd be flipping the house when Ryan transferred, we'd never have children in the house.  Our friends were flipping houses left and right, making tens of thousands of dollars every time they transferred and we were ready to get in the game.

Of course you're cringing by now.  Because you know what happened during the housing crash of 2007/2008.  We moved to Virginia and our sale fell through at the last minute so we decided to rent it out.  After two terrible sets of renters who didn't pay and caused thousands of dollars in damage to the house (and stole our fire-poker set, lawn mower and weed-whacker) and a property manager whom I'm convinced was in cahoots with the renters (advising them not to pay, not to leave, how long it would take for an eviction, etc)  we were lucky enough for Ryan to get stationed back in Massachusetts.  We spent two years hoping the market would rebound, but in the end, Ryan was stationed yet again in Boston, and we'll have another three years to wait (and pay for private schools!). Being an accountant, I ran the numbers: It would take almost exactly three years for us to pay down the mortgage under the "value" of the house and even adding commission we looked to break even by 2014.  We were thrilled.  Even a tiny rebound would allow us to leave without a short sale, and even walk away with a little cash in our pockets. 

Then Congress played a little game of brinkmanship with the nation's debt limit.  The economy is already in the tank, but everyone wanted to solve it their way.  I don't care what your political affiliation, I think they all acted like self-centered idiots.  Between waiting until the last minute and refusing to budge on their pet issues they managed to ignore the needs of the country and in the end, even though they reached a deal at the last minute, confidence in the financial stability of the American government is gone.  S&P downgraded the credit rating from AAA to AA+ and stock markets around the world responded quickly and severely.

Now we've been warned that interest rates will rise, and home prices will tank again.  So much for breaking even.  But someone is going to get an unbelievable bargain on our home when we leave.  We're out of ideas, and out of options.  There's really nothing left to do, so I've quit worrying about it.  Oh well, it seemed like  good idea at the time. 


  1. ((hugs)) As a new homeowner, I'm curious to see where we end up financially in 3-4 years.

  2. Evan wants to buy when we get back to MA. I really don't want to get stuck with a house when we leave 3 years later but I am sick of renting.