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My husband will be losing his job in Jun 2009. We are a single income family. We bought a house last year and are able to comfortably make the payment and live our life with his salary. However it will be very tough to do so once he no longer has a job. Unfortunately he is in the financial services industry which is in shambles now so chances of him getting another job by then looks very slim at this point. And no, before anyone points out, he never made those bonuses which everyone keeps talking about. We just lived within our means and saved. We have savings to live for about a year. So, my question to you is whether we should try to sell now when he is still employed or should we try and hold it till spring 2010 and hope for a recovery. If we sell now, we will be looking at approx. $100K losses including brokerage (ofcourse if we can manage to sell in this market!!). We were wondering if this is wiser than trying to hold on, burn our savings and then still sell at a loss because the real estate market may not recover/bottom by spring 2010. Any ideas or thoughts from people here would be most helpful. We are at our wits end trying to weigh in the options and we'd really appreciate others inputs. Thank you for your time and response.
My husband will be losing his job in Jun 2009. We are a single income family. We bought a house last year and are able to comfortably make the payment and live our life with his salary. However it will be very tough to do so once he no longer has a job. Unfortunately he is in the financial services industry which is in shambles now so chances of him getting another job by then looks very lim at this point. And no, before anyone points out, he never made those bonuses which everyone keeps talking about. We just lived within our means and saved. We have savings to live for about a year. So, my question to you is whether we should try to sell now when he is still employed or should we try and hold it till spring 2010 and hope for a recovery. If we sell now, we will be looking at approx. $100K losses including brokerage (ofcourse if we can manage to sell in this market!!). We were wondering if this is wiser than trying to hold on, burn our savings and then still sell at a loss because the real estate market may not recover/bottom by spring 2010. Any ideas or thoughts from people here would be most helpful. We are at our wits end trying to weigh in the options and we'd really appreciate others inputs. Thank you for your time and response.
Well, it's a question of how much would you loose if you keep the house and burn your savings and then still have to sell your home. All of this is w/ the understanding that he will not find a replacement job.
If it were me, I'd sell now, minimize your losses, maximize/stretch your capital by downgrading to either a smaller home or rent a place, if he finds another job then you can see where you are financially and perhaps then purchase another home within your means.
Would you rather loose the 100k by selling your home now or would you rather loose all your savings AND your home by trying to ride it out?
Thanks Alex. Its ofcourse not easy to lose $100K or more especially when we dont have much but as you said, it may be better to cut the losses and start afresh.
I 2nd Alex07860 advice but that is from the limited information you gave. If your monthly payment now is comparable to downsizing to a rental then that may not make as much sense. But To think prices will rebound enough to be able to ride it out is very wishful thinking. Prices are going down daily. So EVEN if the bottom was early 2009 (VERY WISHFUL THINKING) you would unlikely get back to even to todays numbers by spring 2010.
I just don't see how with the job losses piling up, foreclosures piling up, overall spending/income going down, taxes going in many levels, how prices of housing will do anything but go down.
The good news is your SMART and saved money to prepare for such a situation. And if you have enough equity to sell house and take the $100k hit and still pull money out that will only help your situation. If that $100k hit puts you upside on mortgage than you have to factor in other options. If I were you and if you could I would get a job doing anything you can and buckle ALL spending to save as much as you can. If you can rent out house that may be one option and move in with family if possible. I woudl go into bunker mentality NOW to be able to hold out for as long as possible.
you know I would not take that kind of loss right now!! It is too early. I would try and start looking for new job, update resume, paint house and fix up if ready to sell, and do my hardest to try and find a new job before maybe lets say April 2009. But just to take a big loss now is too early. You never know your husband may be so charming and good at interviewing he may just land a good job. You can't tell right now. He has not tried yet. In the meantime, do all you can to make your house show better. Just to drop 100K is not MY FIRST CHOICE YET!!
We would be able to pull out some money even after taking the hit. Natasha, you are right, recovery in early 2010 does look like an unlikely dream at this point. I am also going to look at rent options. Unfortunately, my only family is in California and I dont think, I can impose on them. I will have to rent in my town so that my daughter's schooling doesn't get disrupted. Thanks for chipping in.
I would try and hold out, if possible. The spring markets have proven to be a better time to sell in years past-let's hope that trend continues.
I believe it will, especially if the rates drop like they talk about will happen at the beginning of 2009.
I agree with stevemorse: both of you should be brushing up your resumes and get out there looking for jobs. You might not have worked in the past, but extraordinary times call for extraordinary measures.
Well, altought I TOTALLY agree that they SHOULD hunker down and freshen their resumes and start looking for supplemental income, I believe the question was to either sell or hold off.
2 seperate issues there.
So based ONLY on the OP original question to either sell or hold off, I'd say sell now and minimize your losses.
and I would say to take a 100K loss is crazy and huge!!!! I would not sell. Its too early to tell. Like I said try first with a plan if it does not look good in April then go next route or step. In the meantime NETWORK!!! Your husband is still working, let him network with all the contact outside and inside his position.
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