$1,700 per month. Recently, I wrote a post about affordable housing (Permitting Affordable Housing). I’ve been thinking about real estate for a long enough time that I’ve written about real estate and was actually a realtor for a few years. (No more!) I’ve even considered moving because of the costs associated with living in a fashionable place (Whidbey Island). Sure. Fine. We’ve all got issues. But then, a good article popped up from a place I’ve considered moving to (Rainshadow Northwest, Port Townsend), and my local paper (South Whidbey Record) did a good analysis of the costs of living on the island. By coincidence, I’d just completed an analysis for selling my house on Whidbey and moving to the Olympic Peninsula, home of Port Townsend. OK. OK. I can take a hint; write about it again. Selling my house on Whidbey Island and moving to the Olympic Peninsula would save me about $1,700 per month.

$1,700 is enough money that even rich people can notice it. Or can they? $1,700 in a wallet makes a fat wallet. It can be easy to ignore in an electronic checking account statement, and even easier to miss in an investment portfolio. Some actively managed accounts can go through that much every month in agent fees. 

$1,700 per month is enough to require me to get a full-time job if I want to stay where I’ve lived for 18 years. But, there’s enough equity in my house that, if I can buy a house with the proceeds, I can truly retire. But, can I buy a house for that? Working until I die may be someone’s noble ideal. They are welcome to it. There’s beauty in the world, and I want to get back to visiting it.

Whidbey Island has become desirable enough that the housing prices have risen; hence, my house’s equity rose enough for me to get a home equity loan. (A Home Loan To Retire Anxieties) Many articles report on people being priced out of markets. If someone can’t afford to buy or rent there, they can’t move there. Articles also mention that some people are priced out of markets that they are already in. Typically, those are retired folks or people who couldn’t afford to move. The focus is usually on property taxes because there’s a connection from property valuations to property tax bills. I find myself being priced out of my house for other, less newsworthy reasons.

Sure. My property taxes are up, but I don’t notice because they’re in my mortgage check. 

The South Whidbey Record article mentions utility expenses, but I’m fairly frugal. I consider it an indulgence when I set the daytime heat to 68F. Layers work. That reminds me. Time to put the comforter in the dryer and set it on high. Cozy.

The expenses I’m seeing increase are systemic.

Port Townsend is a ferry ride from Whidbey. (As island readers interject: Yeah, if the ferry is running and it has enough crew and the tides and currents aren’t a problem.) The Olympic Peninsula and Whidbey Island both get to deal with year-round residents sharing the space with weekenders, vacationers, and short-term rentals. As general wealth increases, it is easier for folks to treat themselves to second, third, fourth, even sixth homes. Sorry, houses not homes. Part-time residents are legal and welcome, but resort towns around the world are finding housing being bought up as fancy hotel rooms rather than year-round housing. The residents who made the place, keep it operating, and provide an anchor for its character find fewer places to live, and if they have a place but lose it, they may have to move away. The place becomes less sustainable. Property taxes may go up, which is good for those tax revenues, but the fewer people living in a place means fewer sales of essential goods, which makes it harder to run a business, which affects other tax revenues.

I’m seeing another consequence that doesn’t readily show up in articles. My friends who run businesses are running businesses, not charities. It might be that the only way they can make their business survive is to support the luxury market. Luxuries aren’t necessities, but they have higher profit margins. Go for it. But, dining out becomes more expensive. Dining out also becomes less available. Sorry. Closed for a private party. Special events. Staffing catered occasions. Dress, or at least costume, codes. Ironically, charities run more fundraisers, but to restricted crowds. Businesses have always shut down between tourist seasons, but what remains may not be enough to sustain the community.

Contractors can charge more, and may even establish minimum price thresholds. Why drop by a long-term resident’s house to fix a window when you can install dozens of high-end windows in a high-end new construction? Besides, that’s more housing, and we need more housing, right? Trying to hire them away from new construction can mean paying a premium. It becomes harder to live. 

My plan is to turn this blog into a sequel to the book that spawned it, Dream. Invest. Live. The working title is ‘From Middle-Class to Millionaire to Muddling By,‘ aka ‘My Roller-coaster Ride Through America’s Wealth Classes.’ I’ve seen this from both sides, and know folks who are much more familiar with the very high end, and the sadly much lower end. No one has to be doing anything illegal for this situation to continue. It is a natural consequence of our economic system.

But. (Because there had to be a but.) Even good things can be taken too far. I think we’re seeing that now. 

Vacation homes are a treat, or at least can be. A few houses here and there don’t have much impact. Typically, about 9% of houses in the US are vacant. Gaps between selling one and buying the next. Temporary job relocations or deployments. People in care facilities. Major remodels that make a house unliveable during the process. Less than 10%. Normal.

Of course, 100% is ridiculous. 

In Port Townsend’s county, the vacancy rate is 14%, and residents are noticing their emptier neighborhoods. On my part of Whidbey Island, the rate was ~25%, but is now over 30%, and climbing. As I understand it, resort and retreat towns are frequently over 50%. 

As I type this, I’ll quickly count the percentage for my street. (In a neighborhood with a marina, pool, and a rich debate over what’s a ‘view’ and who gets to intrude on whose view.) Depending on how I count the corners, ~ 16 houses, 6-8 full-time homes, the rest that I call hotel rooms. At best 50%. 

By the way, my neighborhood of slightly over 200 houses is responsible for its various amenities, which includes a pump for the well (>$24,000 as I recall), a seawall (which we had to replace), the marina (of course), and a swimming pool (that is only open when the kids are out of school, not for use by the rest of us the rest of the year). Those costs are distributed across all of the owners whether we use the services or not. I am still amazed at one estimate for dredging the channel to the marina for $1.5M. It may not be a surprise that the non-yachties don’t care but get charged anyway. (By the way, I had a kayak that I wasn’t allowed to store by the real boats because it wasn’t worth enough. I was only allowed to launch from the beach – which holed the hulls of both of my kayaks.) My homeowners’ dues are now more than one month’s mortgage.

$1,700 per month is also more than my mortgage payment. My story about my personal finances doesn’t mimic the stories in the articles because personal finances are personal. Statistics are for economists, and are important. But why I might feel priced out will be different from someone else who might feel priced. Off-island medical requirements. Commute costs to better-paying jobs. Inflation. And yes, some are impacted by property taxes catching up to their fixed income.

My two biggest expenses are insurance and debt payments. My HELOC loan was manageable until the interest rates spiked. Insurance is usually broken up into its various components, but look through your own bills insurance for a car, a house, health, business, etc. Without subsidies, I wouldn’t have health insurance, and I can’t afford to use it because the insurer may not insure that particular health care.

That’s my story. Everyone in such a financial situation has their personal finance history and situation. The realities in the details don’t make the news unless they can be generalized, or left so individualistic as to be discounted.

There are political solutions. I vote. But, as an independent, I feel that this blog is about as close to politics as I want or fear. I look forward to a government of the people by the people and for the people. Neither party seems to be working towards that, but if you’re an incumbent, well, congratulations.

I vote, but I am also responsible for myself. I can’t wait for politicians and the government.

$1,700 per month. $1,700 per month seems like a reasonable target from a job worth showing up for. $1,700 per month also seems like a reasonable revenue from 18 books (and counting), or teaching classes, or giving talks, or helping people, or some combination of them. I’ve seen my stock portfolio swing through $100,000 in a day. I don’t expect that now, but I know that $1,700 is a tenth of what I’ve seen happen when a company finally announces significant, positive, quantifiable news. And then, of course, there’s the lottery.

I don’t have to sell my house, but I might decide to if stocks stay down, jobs remain illusionary or elusive, book and photo sales languish, and classes and talks are in standby mode awaiting commitments.

And I read articles that point out that I am not alone. I am not alone, and feel sorry for so many who are in worse situations. I thank Rainshadow Northwest and the South Whidbey Record for their reporting. Just don’t be surprised if I have to cancel one subscription and get to start a new one. Let’s see, Port Townsend and the Olympic Peninsula: hiking in Olympic National Park, bicycling Discovery Trail, researching my screenplay at the Maritime Center, – and still getting to dance and write and enjoy life by the Salish Sea. Stay tuned. I have no idea where this story will go next.