Should we move to Portland? Should we sell or rent our house in LA?
January 7, 2010 11:29 AM   Subscribe

Want to move to Portland, totally screwed on selling our house in LA. Need help on deciding whether we should 1. move? 2. sell or rent our house? Apologies for the pretty long explanation.

My wife and I bought our house in LA about 5 years ago. Now, we want to move to Portland, but are a little stuck mentally with whether that is a smart, or at least not insane, thing to do right now.

Here are the house/money facts: We bought our house not at the absolute height of the real estate market, but in hindsight, we certainly overpaid. We paid $440,000, with $100,000 down. We've put about another $40,000 into the house since then (new room, heating/ac, and assorted other expenses). Our realtor, who we trust, told us yesterday that she thought we could maybe sell for $395,000 at best now. With closing costs etc, we estimate we'd get about $35k back (of about $140,000 we've put in). We're not stupid poeple and have definitely come to grips with the fact that we made a bad investment and we're going to lose money, but honestly hope it wouldn't be quite this bad.

We're moving to Portland for several reasons - like a smaller city, want a more bikeable, transitable, walkable city where we can live in the city and still have decent schools. We're also moving because it is more affordable and we can afford a bigger better house that will accomodate our growing family (have a 10 month old son).

In addition to the house investment, we have about another $100k in savings that we've saved up in the last 5 years. Our rough estimate is that the house in the neighborhood in Portland we want would cost about $550k.

Jobwise, I have a pretty well paying job that I can do from anywhere and that I could take with me to Portland. My wife has a well paying job in LA, but so far, no job in Portland. Her prospects are decent, but she may have to take a significant paycut. With our current salary and our current mortgage, we can pay it and save abut $20k/year.

My questions and I'd appreciate your thoughts on any or all of them.
1. Given that we need the two incomes to make the mortgage work, should we move without her having a job?
2. Should we sell the house or try to rent it for a while? We think we can cover our mortgage with the rental income, but probably not taxes and insurance, so we'd be paying out about $400/month, plus we'd have the added hassle of trying to manage the property from afar. On the other hand, the hit we're taking on the house is so big that we're having trouble stomaching it.
3. Another option that we've considered is staying in LA for a while, continuing to save more money, live in the house for a bit longer (we can't stay forever, because it is too small) and then maybe rent for a while in LA while we save and see what happens?

As you can see, we're a bit confused as to what to do. any ad, vice appreciated.
posted by stewieandthedude to Work & Money (18 answers total) 1 user marked this as a favorite
 
In this economy, my advice would be to wait. First, as you said, mortgages on the homes you would be looking at require two incomes, and your wife does not have a job in Portland. While things are getting better in the economy, there are, obviously, many, many people out of work. Even if there is a new-hiring explosion, it could remain difficult to find a job until the ranks of the unemployed thin out. Moreover, I personally believe that it is more likely for displaced workers with a local employment history to be re-hired before newcomers, but I don't have any authorities to back that up.

Second, you're trading one expensive piece of real estate for an even more expensive piece of real estate. I don't think this is the solution. Why not just rent? See this story in today's NYT. If you can rent in Portland (and maybe rent out the LA place), this plan might make some sense, but it makes me queasy otherwise.

Third, you state you can't stay forever and that you'll need to move. This may be true on some level, but I'm sure your house is bigger than the 600 sq. ft. apartment I lived in with my parents in NYC until I was 5. Maybe you move in a few years, but there would seem to be no rush if you've just got a 10-month old.

Hang in there. Things will only improve. If you cut and run, you're going to take a bath.
posted by Admiral Haddock at 11:49 AM on January 7, 2010 [2 favorites]


I can only address question #1 (because I'm dumb when it comes to mortgages and house stuff).

The job market in Portland is not good right now. Actually, it's piss-poor. I think the unemployment rate is around 11%. Many, many qualified people are unemployeed in Portland right now and many more are significantly underemployeed. I would not move to Portland right now without a job already lined up.

It might help to tell us what field your wife is in. There are a lot of Portland mefites and we might be able to give you an idea of job prospects with a little more information.
posted by dchrssyr at 11:54 AM on January 7, 2010


Portland's a terrible place to look for a job, and "decent" prospects aren't enough.

I think Admiral Haddock is entirely right. You're insane to make a move which necessitates two jobs, without one of the jobs secured. Renting your house in LA just exposes you to more potential loss. And you're overestimating the need for a bigger place. Plenty of people make small places work, even with kids. I'd say hang tight, save more and move when things are much more steady.
posted by Dee Xtrovert at 11:56 AM on January 7, 2010 [2 favorites]


Portland is terrible for jobs generally and in this economy, I wouldn't bet on her getting a job.
posted by k8t at 12:03 PM on January 7, 2010


Another vote for Portland being a notoriously difficult place to find a good job, even in good times. If you move, I think you cannot count on your wife getting a job with any sort of decent pay within the next few months to a year.

Perhaps you can reexamine your target housing market to make it more realistic for a single income? I was shocked to see that you anticipate spending more on a house in Portland than the value of your place in LA. I briefly looked at Portland real estate a while back and it seems you could get a decent 3-4 BR place for half that (or under 300 at any rate). Of course I know things vary a lot from one neighborhood to the next in terms of quality of life, but... maybe expand your options a little bit, at least?
posted by rkent at 12:06 PM on January 7, 2010


The economy has bitchslapped the job market here right upside the head. Not a good time to move here. Don't sacrifice your biggest investment to move to a place where, to find a job, your wife will be competing with the many, many people already here who are buying their groceries with foodstamps.

How about trying to put a little Portland in LA by trying to make it more bikeable/transitable/walkable? Portland became that way because of a strong grassroots effort among its citizenry.
posted by hollisimo at 12:21 PM on January 7, 2010


It also sounds like you are looking at too much house for your budget right now. I have no idea how much money you make, but that is too much house with unknown circumstances.

Maybe break it into baby steps:

Stay in L.A. for another year.

Rent for a year after that in Portland to see if you really want to stay there.

Then start looking for a house.
posted by Vaike at 12:22 PM on January 7, 2010


As someone who has moved from and to Portland and LA (Moved to Portland, then LA, and then back to Portland) I can tell you the job situation here is not the best. I say not the best because it is not the worst, I was able to get a job, and recently changed jobs a month ago. For some context, I'm 27 and work/ed in web design and recently moved into a position at a non-profit as a web systems analyst. Most everyone I know with an adult job is in similar fields (graphic design, flash developer, PR) and everyone else I know works service jobs with quite a few working with the mentally disabled in group homes.

In terms of housing I would say right now is the best time to strike here, there are so many beautiful houses on the market with no buyers that some of them are practically a steal for what they are (1920s craftsman).

When you say decent schools, where are you schooling your kid now? The graduation rate at the public schools here is ok, but terrible at some high schools like Roosevelt but better than LA on the whole. There are plenty of private and charter schools here but I don't have any children so the most I've investigated is knowing that ideally I would want to send mine to The Waldorf School.

metafi mail me if you have any more specific questions about Portland, OR.
posted by wcfields at 12:24 PM on January 7, 2010


Okay, I'm going to give a different perspective. In 1996, my husband and I left a decent house, good jobs, family, friends, etc. and moved from SoCal to NorCal for some of the same reasons you are contemplating - not where we ultimately wanted to live and put down roots, wanted a better life for our child, etc. We lost all the equity in our house, went through all our savings, took a new job at half the salary I was making in SoCal. And yet, I don't regret the decision at all, ever. We struggled financially for several years but the things we gained were the following -

- We did indeed put down roots. Since then several family members have moved to where we are and others are now closer than they were before. We have friends here and our kids have grown up together.

- My son was able to stay in the same school district for the entire 13 years (K-12) he was in school. That stability means a lot to kids.

- Our quality of life greatly improved immediately and I have been able to enjoy that for the entire 15 years since the move.

To make it a softer landing if you do move, consider the following -

- Sell your house but don't buy right away. Rent for awhile so you can decide where you want to live, what are the best school districts, etc. Certainly don't get locked into a mortgage until you have the income in place to pay for the mortgage.

- Maybe wait a little while before moving. Do so before the kid enters school but for now just continue to sock away the $$ to help once you move.

Good luck.
posted by eleslie at 12:29 PM on January 7, 2010


Thanks, everyone. My wife does campaign/organizing work, so it is a pretty specialized field and she's damn good at it, so that is why I say she is fairly likely to be able to find something. I hear you, rkent, on the shock of the house being more expensive in Portland. Really, it is just that we would like to move from a small house in a marginal neighborhood to a significantly larger house in a nice neighborhood with good schools.

Appreciate any more thoughts.
posted by stewieandthedude at 12:30 PM on January 7, 2010


Whatever the cost of the new house would be, add to that the loss you'll take on your current house. That's just another way to look at the real cost of that supposedly low-cost home. If you're buying a home that would otherwise cost more than your own home, then it could be a good investment, pricing-wise.

Also, Portland is saturated with people right now and has very few jobs. It's the A-number-one top of the NYC hipster "when I leave NYC here's where I want to go" list, and has been for several years. I'd consider the cultural implications of lots and lots of hipsters moving to one specific area. I'm not sure what those implications would be - better schools, worse schools, more fashion-focused, superficial people, fewer, etc., but whatever they are the essential character of Portland is bound to change (more than it has already).
posted by lorrer at 12:34 PM on January 7, 2010


Rent, don't buy.

You paid 400,000 for an overpriced house in LA and think that a 500,000 house in Portland is not similarly overpriced?

I don't follow your logic.

A good sign that you can't afford to own a house is that you require two incomes to service the debt on its mortgage. Just because the tax code encourages you to buy a house doesn't mean you should buy one.
posted by dfriedman at 12:44 PM on January 7, 2010 [4 favorites]


My wife does campaign/organizing work, so it is a pretty specialized field and she's damn good at it

That's not exactly an unpopular career choice in Portland. There are plenty of people that work in this field and already have the right social networks. Being good at what you do do is not enough to get you a job here.
posted by tallus at 1:10 PM on January 7, 2010


Portland is depressing emotionally, and depressed economically.

I'm not sure why this is your top choice. Can you make adjustments in your lifestyle here in LA to make it work for the time being?

LA super sucks in a lot of ways, I know. But if you dig beneath the surface, there is gold in them thar hills! Seriously. There are fabulous year-round outdoor opportunities (even for families.) Similarly, there are neighborhood pockets of goodness to be enjoyed everywhere. For example, I'm pretty sure the Beverly Hills Library doesn't ban you as a patron if you live in Palms or Echo Park - know what I mean? Sometimes you get in a rut and you just gotta find new stuff to do and new ways to do it.

I suggest changing-up where you currently spend your time (shopping, parks, farmer's markets, daycare, cultural stuff, etc.) until moving is more economically feasible.

YOU ARE LUCKY ENOUGH TO HAVE 2 INCOMES AND OWN A HOME IN ONE OF THE MOST STABLE HOUSING MARKETS IN THE COUNTRY.

You won't have this economic delay to deal with for long. Enjoy the sunshine here in LA while you can.

Also, Portland? You can do better. Take this time to thoroughly investigate better options. Portland is the epitome of someplace that looks great on paper, but in real life can be a downer for most people. You can do better.

Good luck on your journey:)
posted by jbenben at 1:42 PM on January 7, 2010 [2 favorites]


The least risky and, to me, most logical solution is for your wife to apply for jobs in Portland now. I get that you want to leave LA but you have a place to live, you've got jobs, your son is years away from school, and you don't have a desperate need to move to Portland tomorrow. When your wife gets a job you'll know exactly what your budget will be for housing in Portland (accounting for the hit you'll take on your current house). Yeah, maybe you'll have to rent a house there for a few months while you look for one to buy. But that seems vastly preferable to moving to Portland into a house you can't afford without a job your wife doesn't have and may not have for some time.
posted by 6550 at 1:48 PM on January 7, 2010


I have to agree with tallus that your wife's field is not unpopular in Portland. I know lots of unemployed and underemployed people in Portland and they are all well-educated and have experience, are socially well-adjusted and great at what they do. It's just that Portland is glutted with people like that, who really want to live there for all the reasons you mentioned. The job market is abysmal right now.

So have your wife start applying to Portland jobs and pulling strings within her network - if she gets something, great! Then you're golden.
posted by Knowyournuts at 1:57 PM on January 7, 2010


Several of my friends have moved to Portland from Los Angeles in the past few years, and they are all un- or underemployed, and struggling financially (and emotionally). I would strongly suggest that you stay in Los Angeles for several years and save your money.

There are lots of things to do with kids in LA, many of them free or inexpensive, and there are lots of outdoor activities that you can take advantage of year-round (the Santa Monica Mountains has a lot of kid activities).

Also, have you looked at the local schools? They're probably better than you think, and now is the time to start learning about and making contacts at your local school. Check out Sandra Tsing Loh's Informal Guide to the LAUSD, and its companion website, Ask a Magnet Yenta.
posted by mogget at 3:39 PM on January 7, 2010


I'm wondering what neighborhood you have in mind and why you think you need to spend $550,000 on a house to fit a family of three. Especially given that you seem to want to be in Portland not in the burbs.

I moved to Portland a few months ago, and it is a great city. But I agree about renting first, especially since you are moving from someplace with a very different climate (lots of folks complain about the winters here, though I don't mind it so far--but then again, I like rain). Also, yeah, the job market is rough. Lots of talented people are out of work. And, honestly, there is a bit of a prejudice against folks from California. You might find it charming or annoying.

Anyway, I've been looking at house listings in inner PDX just about every day. How much square footage do you need and what neighborhoods do you have in mind? The better high schools are considered to be Grant and Lincoln. So you'd probably want an elementary school that's a feeder for one of those high schools. Right now there are houses for sale in inner NE Portland for under $300, but for $350-$400 you can get a gorgeous old house on a nice sized lot in a Grant-feeder neighborhood.

You could spend a lot more for a view of Mt. Hood, I suppose. But it's so cloudy you won't get it very often.

People talk about schools being lousy here, but we've been quite happy with my son's elementary school. And it's not necessarily considered a fancy one. It doesn't have a great score on greatschools.net.

And really there aren't any really bad neighborhoods in Portland. There are certainly whiter neighborhoods, but it's not sketchy here.
posted by bluedaisy at 9:45 PM on January 7, 2010


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