"lost" $30,000 today

[Jenn4615]

Our houses have gone down about 20k.. But my property taxes sure went up this year... and quite a bit!

 

[Tina]

Count me in as another big "loser." I bought my townhouse in 2007. I did everything right: 20% down, 30 year fixed rate mortgage, etc. And then the housing market plummeted. My assessment has declined $130k and has left me upside down on my mortgage. My life savings has disappeared. No equity, no exit plan. I had an opportunity this year to relocate and would have loved to have taken it. But I don't have $50K plus realtor fees to shell out in order to sell my house. I do love my house, but at the same time, I feel trapped.

 

[eliza61]

Wonder how many owners just assumed they were going to gain equity....

you do realize that buying a house is not some promise that you will be able to flip it, right??

I think that was a major part of the housing crisis DF95. Home values were escalating at ridiculous rates that were not real. every one got caught up in the "bubble". Mortgage companies and banks didn't help offering lending vehicles that never ever would have been offered 20 years ago.
As a general rule real estates value (like any other commodity) goes up and down. just like stocks. Hopefully most people are able to ride out the down swings and pay off the loan at the same time, thus giving you more equity.

And while it's never fun to think some thing loses value, it's not realistic that any investment is going to always gain value.

 

[eliza61]

Count me in as another big "loser." I bought my townhouse in 2007. I did everything right: 20% down, 30 year fixed rate mortgage, etc. And then the housing market plummeted. My assessment has declined $130k and has left me upside down on my mortgage. My life savings has disappeared. No equity, no exit plan. I had an opportunity this year to relocate and would have loved to have taken it. But I don't have $50K plus realtor fees to shell out in order to sell my house. I do love my house, but at the same time, I feel trapped.

You do realize that 2007 is simply 3 years ago and you brought at the beginning of the recession. Your life savings have not "disappeared". You still have your house, hopefully you are still paying on the mortgage (which means you are building equity) and the market will go up. It will not bounce back 50% in 1 year, it was never meant to do that.

One of the myths I think gets perpetuated is that "everyone" should be a homeowner. that is not true. If you think you will be job hopping and relocating alot over the next 10 years home ownership may not be right for you.

 

[Green Tea]

Don't worry about the assessment; be glad that taxes might go lower. The assessed value is meaningless as long as you stay there. The assessed value and the true market value are not the same thing.

 

[crisi]

You do realize that 2007 is simply 3 years ago and you brought at the beginning of the recession. Your life savings have not "disappeared". You still have your house, hopefully you are still paying on the mortgage (which means you are building equity) and the market will go up. It will not bounce back 50% in 1 year, it was never meant to do that.

Yep, get used to the idea of "paper losses" and "paper gains" - That's when you look at the 401k you are still 20 years from needing and realizing you've "lost" $50k, but know since you don't need it now, its just on "paper." Likewise, when the market is really hot, your 401k goes up $50k....you don't really "have" that money because its just on paper.

Or, in simple terms, you might buy a Beanie Baby for $7, discover its selling for $50 on eBay. But if you don't sell it for $50, it isn't really $50 to you. Then the Beanie Baby market crashes and you sell it at a garage sale for $1. You lost $6 on your Beanie Baby investment, not $49. And, if you bought the Beanie Baby because you really liked it, you didn't really loose anything because you got your value from it. In fact, you can consider yourself $1 ahead if it was actually worth the $7 to you to own it to begin with.

If you don't NEED to sell, hang on and ride it out and try not to worry about it (hard, I know). The problem comes in when so many people need to sell and they are upside down. The family I was talking about upthread, there is no way a baby could fit for long in that tiny one bedroom house - they need to move.

 

[RadioFanatic]

This is exactly why I waited to buy a home until I knew it was going to be the one I lived in for the rest of my life. I know some don't have that option; however, my and my husband's profession lets us stay in the same place thankfully. Now, I don't have to worry if I'm losing equity bc it's just my home, KWIM? I'm so sorry for those of you having to deal with this.

 

[Planogirl]

We live in a so-called starter home and I'm glad. There's only three of us and we have plenty of room. Our payments are lower than many others which was nice when we went through some financial upheaval a few years ago. We likely would have lost our house if we'd had one of the bigger "McMansions" so many bought and later lost.

Anyway, our house has appraised for pretty much the same for the last five or so years and our area is still growing like crazy. It's odd here though with some houses losing a lot of value and some gaining. I see no sense to it.

 

[RadioFanatic]

My hubby's co-workers are shocked by our frugality in housing. They have houses that double our square footage and subsequently their mortgage.

Us too. We found a five bedroom, two full bath for about $100,000 less than most of the three bedrooms around here - we have a small yard as the alternative. Could we have bought more? Yeah, we only used a third of the amount of mortgage we were preapproved for. And most of our friends paid $100-150 more for their house than we did. But we love our home, and our monthly mortgage payment, with tax and insurance included, is $25 less than our monthly rent was, and we can still easily swing it if something happens to one of our jobs. That's what I wanted- a home I felt safe, happy and not stressed about finances in.

 

[mhsjax]

Us too. We found a five bedroom, two full bath for about $100,000 less than most of the three bedrooms around here - we have a small yard as the alternative. Could we have bought more? Yeah, we only used a third of the amount of mortgage we were preapproved for. And most of our friends paid $100-150 more for their house than we did. But we love our home, and our monthly mortgage payment, with tax and insurance included, is $25 less than our monthly rent was, and we can still easily swing it if something happens to one of our jobs. That's what I wanted- a home I felt safe, happy and not stressed about finances in.

Where I live you couldn't use the word safe for a 5 bedroom house for under $100,000.00. Sure you may have felt safe financially, but in my world you would probably be in a drug infested roach infested slum. Then again I am in Florida in one of the worst hit counties of this.

All of the people here acting smug(as far as I am concerned) would be in a scary place if they lived where I lived. I have seen countless white collar professionals with good spending habits that are losing their jobs left and right. These are people that are in their 30's and 40's with kids. Should they wait until they get a job where they won't have to move. That is unlikely. So many people around here are transplants due to employment, and I have seen many people go. We have the Rail road here and they are famous for transferring. Yes some people did buy into the bubble trying to make money and acting foolishly, but around here,not so much. I live in a very family oriented place and they are just normal hard working people mostly professional with good salaries that havn't bought in over their heads. So I don't get the attitude of some people. Rant over.

 

[MommaSnowwhite]

I agree with mhsjax. It has goten pretty smug around here.

We purchased out home over 5 years ago, it would probably be considered a McMansion by some people. We wanted certain things and when we moved there wasn't alot of inventory. We were transferred here by a company and not owning a home would be silly due to tax reasons. Yes we could have settled and purchased a smaller home, but we would have lost the same amount of money.

We are not upside down on our home, we put over $100k down on our house when we purchased it. The loss (in real money) leaves me with a sick feeling in my gut when I think about it. If we were forced to move (by The Man) we would have a difficult time purchasing another home without depleteing our savings for a down payment. We have always "purchased well" with our homes making modest profits when transferred, but it is all gone now!

 

[RadioFanatic]

Where I live you couldn't use the word safe for a 5 bedroom house for under $100,000.00. Sure you may have felt safe financially, but in my world you would probably be in a drug infested roach infested slum. Then again I am in Florida in one of the worst hit counties of this.

All of the people here acting smug(as far as I am concerned) would be in a scary place if they lived where I lived. I have seen countless white collar professionals with good spending habits that are losing their jobs left and right. These are people that are in their 30's and 40's with kids. Should they wait until they get a job where they won't have to move. That is unlikely. So many people around here are transplants due to employment, and I have seen many people go. We have the Rail road here and they are famous for transferring. Yes some people did buy into the bubble trying to make money and acting foolishly, but around here,not so much. I live in a very family oriented place and they are just normal hard working people mostly professional with good salaries that havn't bought in over their heads. So I don't get the attitude of some people. Rant over.

The house isn't less than $100,000 - it's worth $100,000 less than other homes with less bedrooms. You misunderstood what I said. And to call me smug means you REALLY failed to get the gist of what I was saying. My previous post shows I feel for people who can't do the same as I did - I was just relaying my experience and how I decided to handle my situation. So feel free to rant all you want, but you clearly have it directed to the wrong person.

 

[Kay1]

I sure hope this doesn't sound smug because I sure don't feel smug, but, to some of you who feel trapped and seem disheartened, remember if you have to move for work there's always the possibility of renting out your house.

I'm thinking of doing a re-fi for just that reason. If my husband lost his job or got a great offer that required relocating we could rent this house and maybe come out even or slightly ahead. Of course, I understand this may not apply to everyone depending on the area in which you live.

 

[eliza61]

I agree with mhsjax. It has goten pretty smug around here.

We purchased out home over 5 years ago, it would probably be considered a McMansion by some people. We wanted certain things and when we moved there wasn't alot of inventory. We were transferred here by a company and not owning a home would be silly due to tax reasons. Yes we could have settled and purchased a smaller home, but we would have lost the same amount of money.

We are not upside down on our home, we put over $100k down on our house when we purchased it. The loss (in real money) leaves me with a sick feeling in my gut when I think about it. If we were forced to move (by The Man) we would have a difficult time purchasing another home without depleteing our savings for a down payment. We have always "purchased well" with our homes making modest profits when transferred, but it is all gone now!

Did your house burn down? You say it's all gone what happen to the structure?

I don't think it's smugness. It's absolute reality. A house is a commodity. Yes it absolutely sucks when it losses money but it is also very unrealistic to think housing values will always go up.

Unless you have to move immediatley it is not "All gone". Do you not still have the house? You still have an actual structure that will gain value. When the market rises again, that house will appreciate in value. Stocks lose money, houses lose money, 401K's lose money. My 401K lost almost 1/2 it's value in 2008. I still have the same # of shares so now that the market is over 10000 again my 401k has recouped much of it's value plus I brought more shares will they were cheap so in a few years they too will have value. (these are generalizations, I know people have special situations that make things difficult. I'm talking "on average")

You purchased 5 years ago, you've probably only had 1 maybe 2 good years of a rising market. that is not a lot of time for any thing to appreciate. In 5 years there stands a very good chance that your house will have appreciated and since you're still paying on it, you're gaining more equity.

I think one of the problems (besides property taxes. can't help those) is that people still think houses should double and triple in value in 1 year. Those returns were inflated and not sustainable. Houses are made for slow, steady rates of returns. So don't think of your house as "Worthless" or the value as "all gone". it is not.

 

[MommaSnowwhite]

Do you live in Michigan? We purchased our house and within 6 months the housing prices began to drop and continue to do so. We have had major companies leave this area and although my DH company is actually doing better than ever before we know that we will be transferred before we regain any of our money back. Just a fact. I have never expected any of our 5 homes to appriciate over night, just a nice steady small amount. Did anyone expect the housing prices to drop so much? I really don't think so, yes the prices were inflated, but I iknow people here who have lost more value than the house is worth.

So, the money is gone. We have lost it. We still have a home. It just isn't worth much and probably would take a very long time to sell. I really hope we can stay here - I think Michigan is my favorite state so far. I am just realistic that my DH will be transferred in the next two years- fact of life.

 

[mhsjax]

The house isn't less than $100,000 - it's worth $100,000 less than other homes with less bedrooms. You misunderstood what I said. And to call me smug means you REALLY failed to get the gist of what I was saying. My previous post shows I feel for people who can't do the same as I did - I was just relaying my experience and how I decided to handle my situation. So feel free to rant all you want, but you clearly have it directed to the wrong person.

Sorry I mis read. However, I didn't call you smug. I said all the people around here acting smug. I didn't say you where, I didn't say everyone was acting smug. so really you FAILED to read my post. If I would have thought that you were being smug then I would have said your name or said YOU were being smug.

 

[mhsjax]

I sure hope this doesn't sound smug because I sure don't feel smug, but, to some of you who feel trapped and seem disheartened, remember if you have to move for work there's always the possibility of renting out your house.

I'm thinking of doing a re-fi for just that reason. If my husband lost his job or got a great offer that required relocating we could rent this house and maybe come out even or slightly ahead. Of course, I understand this may not apply to everyone depending on the area in which you live.

Nope not smug at all, I have friends who are doing this. Offering ideas and help isn't smug. Stating that you should buy a house to live in (as another pp did) instead of as an investment was.

Not everyone is trapped and I do know some people that have purchased way over their heads, hoping to flip and make money. I just hate the judgement that seem to run rampant that everyone is in over their heads and greedy and therefore, they get what they deserve when that may not be the case at all.

 

[Planogirl]

Some people say that only those who have to move to take another job might be in trouble. There are also those who lose their jobs, go through their savings and unemployment and still have a house payment to contend with. They would love to sell but it's hard in some areas plus if they are upside down then it's a big mess.

It's true that the structure might still be there but if you get to a point where you can't afford the structure then it might as well be gone.

 

[disneyfans95]

I don't think anyone was being smug. I think they were being honest and realistic.

We made sure when we bought our first house a year ago (after years of saving) that we had over 20% down and would be paying less then what it would cost to rent. Even after taxes, oil, etc that you don't pay with a rental.

Our vaule dropped about 10k in the year. We are not worried and understand it is not some right to gain equity. What we KNOW is that in the last year, we paid less then we would have to rent and are moving towards ownership and having it paid off.

 

[mhsjax]

I don't think it is a right to gain equity, but usually you do. I am not even arguing for me, I am just stating that sometimes you expect to live somewhere forever and then plans change through no fault of your own, and if you can't sell your house and you have to move then you may not be able to afford to purchase another house for your family.