[QUOTE=Annie-Xmas]
Real estate person checking in. The title should read “one third of new home owners owe more than the house is valued at in today’s market?”
No Realtor worth their title uses the expression “market worth.” The phrase is “market value.” What is the value of your house in today’s market.
Will house values go up again. Ya betcha. I’ve been doing this a long time and have seen prices go up and down and up and down several times.
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well you have to talk to Bloomberg about the title as I stole if from their article–of course I screwed up the spelling!
I agree that values will go up and down, but given the rather dramatic inflated prices in recent years and the recent impact of the subprime financing will this leave a more lasting impression on the market then previous ups and downs?
[QUOTE=jsc1953]
We bought our home 10 years ago, and “used the equity as an ATM”, as the saying goes – to the point where we had no equity and a sub-prime mortage that ballooned well beyond our ability to pay.
Long story short…we owed $680k (which our lender thought was a reasonable value when we re-fi’d into the stupid mortgage). Put it on the market last month for $600k. Got an offer for $532k.
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Yikes! So what happens in this situation if you don’t mind me asking such a personal question. Do you just eat the $148k? That seems like way too much to absorb. This is what I was wondering in my OP—do you eat that loss, walk away from it, or stay in the house long term, hoping the value comes back up? Or there really any other options?
[QUOTE=Hakuna Matata]
Yikes! So what happens in this situation if you don’t mind me asking such a personal question. Do you just eat the $148k? That seems like way too much to absorb. This is what I was wondering in my OP—do you eat that loss, walk away from it, or stay in the house long term, hoping the value comes back up? Or there really any other options?
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If we had been able to afford the mortgage, we most certainly would’ve stayed, and ridden out the down cycle – we had no particular desire to move. But after our mortgage went up 50% – and we stayed current, even at that rate, for a year – we threw in the towel. Our intent was just to walk away: leave the keys in the mailbox, call the lender and say “take it, we don’t want it anymore.” The lender had other ideas, of course: short sale. We find a realtor and put the house up for sale, and they take what they can get and eat the rest.
[QUOTE=Annie-Xmas]
Will house values go up again. Ya betcha. I’ve been doing this a long time and have seen prices go up and down and up and down several times.
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So the only thing that is constant is change?