Real Estate In the PNW & the California Drought

Everything is done for the Windy Firs property now– everything. Except the exterior painting job that’s required now to meet the appraisal value. Long story short, the appraisal didn’t come up to what we offered, we could have made up the difference, but luckily didn’t have to… Fannie Mae came down in price several thousand dollars instead! So we get to pay what we originally offered on the house before the bidding war broke out. YES! The only stipulation was that the faded paint job was not up to snuff, so it must be done at the seller’s expense. All we need now is 3 dry days in a row for some hired contractors to get the job done and we can close the next day.

That makes things a little weird, since now we’re dependent upon the weather to close a financial contract. How fitting. We managed to make a deal with our current landlords to stay at White Gables through the 15th of April, though, to give ourselves ample time to get everything done and not feel rushed. Once it became clear we weren’t going to get things completed before the end of March, we made sure to buy ourselves some wiggle room. Luckily, our new landlords cooperated, so its all working out.

Meanwhile, we’re hearing stories from other people who are trying to buy houses, like our landlords and several of Gerick’s co-workers and even executives at his company who buy properties to manage as investments. Even the ones with early knowledge of new stuff on the market and 100% cash to put down are finding themselves pushed out with at least 5 offers made before they even get a foot in the door. Its crazy.

Nearly all of the investors they are competing with are from California.

There is a HUGE surge in people leaving that state and many, perhaps most, seem to be coming north. Things were a little hairy last summer, but with the spring, it seems real estate is going crazy right now. Which is understandable. Reports that much of California will be out of water– completely– within just a year seem to be pointing to a reason why. Anyone with brains and means is getting out while the getting’s good.

We apparently made our move at the right time– just barely.

I wonder how long this exodus will go on? California has a great number of people, despite regular leaks from that state going northwards since the 80s. That trickle has become a stream over the last decades as living standards in California have declined. But what’s being seen now is more like a rushing torrent of people. But who can blame them? If there’s no water left for drinking soon– you can’t live in a total desert attempting to share what tiny bits of water may or may not fall from the skies. The infrastructure of California requires much more water than its getting now…

Apparently, scientists have been able to determine that the last 200 or so years of relatively stable levels of water in most of central and southern California is something of an anomaly. Normal weather for most of California’s history and pre-history it was more of a desert climate. Now, combine the pendulum swinging back towards a more normal rain pattern with Global Climate Change and we have a very bad problem on our hands.

Most of the fruits and vegetables and even many nuts Americans eat come from that super produce state. How will this affect prices in another year or two as suddenly the supplies of food are cut off from there? One shudders to think. Having a garden is starting to look more and more intelligent, though, that’s for sure.

The Pacific Northwest has been a haven of mild weather in comparison to most of the nation, but now that very fact is drawing ever higher numbers of people from other states. And there are some grim consequences for that as we’re starting to see now.  Higher housing prices, higher rents, higher food prices.

Lately, when I allow myself to take a breath and think things through, I realize I have a hard time digesting mentally the actual numbers of people we can expect from a mass exodus out of California. I’m sure, despite the desperation of things, many will hold onto crazy hope that the rain will return, despite all evidence to the contrary. Others will be stuck and find that getting out is impossible. I’m trying to imagine drought refugees like the Oakies of the dust bowl era. The people with money, family or friends in other states, or even just a bus ticket, no dependents, and a plan will get out easily. But what about those who lack all those things? I think this is an evolving story that will see some repeats of the 30s returning into our collective story as a people.

I’m a little freaked out, frankly, that we made it just under the deadline. The fracking bubble is busting up even as we speak. Weather is going nuts everywhere in this really obvious way. And California is about to go from the biggest asset in the country to its greatest liability. Jezus, that was close!

And our adventures are just beginning…