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I know folks that sold at 60% UNDER what they paid for.
This should serve as lesson that those "merry go happy" times of 2004, 2005, and 2006 when people paid insane amounts for homes not worth half those prices are over, and should stay over. This idea that you buy a house and hope that it appreciates by $400k+ within 5 years+ is unrealistic.
Some neighborhoods depreciate in value due to lack of maintenance, too many renters, the schools can go to the pooper, damage of any sort, etc. That expectation should stop as it it not realistic. Not all homeowners are into remodels. Only those in the higher income brackets might be.
A home shouldn't be an asset. It costs so much more to own it, that there is no way I could call it an asset. Money stashed in a bank is an asset...a home that can be destroyed by a natural event, or an unnatural event, that could spike your insurance through the roof is not an asset. In no way I could ever consider a home an asset. Sorry.
Traditionally homes were considered assets, as it was assumed their value would increase over the years. It was the housing market boom in the mid 2000's, where property ownership became purely speculative, and the quick flip by investors hoping to make obscene profits, as well as folks buying homes they couldn't afford that turned the tide of the traditional concept of property ownership.
To those of us who owned homes for a long time, and resisted the temptations of that housing boom, our homes are still assets.
back to the OP, yeah it's frustrating. we looked at a house that's priced 17% higher than it sold for - a year ago! Values in my area have not gone up that much in a year. Their realtor mentioned the owners are going through a messy divorce and priced it because they need the money. Apparently one of the MIL's wanted to price it even higher. ooookay! I hope they enjoy making that mortgage payment while it sits on the market because nobody is going to bite.
Traditionally homes were considered assets, as it was assumed their value would increase over the years. It was the housing market boom in the mid 2000's, where property ownership became purely speculative, and the quick flip by investors hoping to make obscene profits, as well as folks buying homes they couldn't afford that turned the tide of the traditional concept of property ownership.
To those of us who owned homes for a long time, and resisted the temptations of that housing boom, our homes are still assets.
I agree with this.
We have moved 3 times in the last 12 years. I would consider our homes nothing but a liability. The house we are buying now would be 100% paid off free and clear if we had the extra 50-80k in our pocket that we lost to lenders, inspectors, realtors, and falling values post-2000.
We got out of Detroit by the skin of our teeth in '06 with only a 10k loss before fees. The people who bought our 300k home lost it via foreclosure a few years later, and I saw the bank relisted it for half of what we paid for it originally!
A house is only an asset in some cases, in this economy. If you owe on your home, you are essentially a slave to the banking and real estate industry, and being a financial slave to these corrupt and manipulated industries is never in your best interest, nor is it an asset.
Banks and lenders made off with billions (or trillions?) in foreclosures and bailouts selling the "American Dream." Do some research on how corrupt the banking system is in this country and you will see what I mean.
If the OP had offer 50% of asking, then I would have understood their rejection. But they're obviously infatuated with the idea that they'll find a sucker to sell at a higher price.
Or they think they've priced it fairly vs comps at the current price. Who knows?
I priced my old condo "to sell", meaning slightly under market to move fast. I still had someone offer 10% off because they claimed comps backed them up. I said, "Which comps? I'd like to see them, because I know exactly what these have sold for over the last 18 months" They hemmed and hawed, then admitted they didn't have the comps they said they had.
I sold it to them for 98% instead of their original 90% of list, and I gave them the 2% off because I was feeling generous. It sold in four days, so I'm not exaggerating about my pricing!
We got out of Detroit by the skin of our teeth in '06 with only a 10k loss before fees. The people who bought our 300k home lost it via foreclosure a few years later, and I saw the bank relisted it for half of what we paid for it originally!
{snip}
We have moved 3 times in the last 12 years. I would consider our homes nothing but a liability. The house we are buying now would be 100% paid off free and clear if we had the extra 50-80k in our pocket that we lost to lenders, inspectors, realtors, and falling values post-2000.
We got out of Detroit by the skin of our teeth in '06 with only a 10k loss before fees. The people who bought our 300k home lost it via foreclosure a few years later, and I saw the bank relisted it for half of what we paid for it originally!
A house is only an asset in some cases, in this economy. If you owe on your home, you are essentially a slave to the banking and real estate industry, and being a financial slave to these corrupt and manipulated industries is never in your best interest, nor is it an asset.
Banks and lenders made off with billions (or trillions?) in foreclosures and bailouts selling the "American Dream." Do some research on how corrupt the banking system is in this country and you will see what I mean.
Unfortunately, I think research or not, we've been hit in the face with the corruption and greed involving the banking/home loan industry, especially during the real estate boom. Many folks were caught up in the assumption that property values would continue to escalate and sell easily forever, and many were also deceived by fraudulant lending practices and sleight-of-hand financial arrangements, mortgage bundling to investors, the list goes on and on. I admit it was tempting to think one could use one's supposedly unlimited equity as a bank for the latest and greatest "must have", or items which would otherwise be unaffordable, but we were always cynical about such assumptions, never believed anything couched to us in such glowing terms ( as in, "if it sounds too good to be true....") so we escaped that trap.
I agree, owing on one's home makes one slaves not only to the banking industry, but to the insurance industry and by extension, the government as well- the last as regards issues with homeowner's and flood insurance, which IMO in this mileu is a crapshoot at best as homeowners are considered cash cows to the insurance industry and the guv'mint ( FEMA and the quasi-governmental Citizens insurance in Florida and perhaps in other states). To that end IMO it's questionable that disaster claims would be paid by the insurance industry yet the rates continue to rise.
Once we figured that out, and were in a position to do so, we resolved never again to owe any debt on our property. And we don't. I'm not so sure that were we interested in selling our retirement property, we'd recover what we put into it, probably couldn't sell it for what we put into it. So in that aspect I'd guess it could be considered an asset, but I'd say it wasn't an investment these days. Doesn't matter, we don't care to sell it.
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