Can't sell the old house! (Austin, Lakeway: foreclosures, to rent, HOA)

[centralaustinite]

I really feel for you! We tried to buy a house in another area of Austin in 2008 and encountered a smaller scale version of this dynamic. The RE market was slowing down but we didn't get ahead of the price curve, a neighbor put their house on the market at a WTF price, we started with a more reasonable level, then dropped the price regularly, we had lots of showings but no offers. The neighbors house never sold, they pulled it off the market, rented for a two years, then sold it this year for less than out last price!

We were trying to buy a house in NW Austin that was also caught in the same dynamic. We saw it the same day as two other very similar properties in terms of age and condition. This house was at the highest price point of the three $499K, the other two started at about $475K but each of the other owners need to sell that year, and they did, at around $430K, they got ahead of the price curve. The owner of the house we liked at bought it in 2006 at the market peak, she could never understand that those prices were not coming back. The house has been on the market for two solid years but still hasn't sold, the price is now $450K. They could have sold the house quickly at that price two years ago, now to move the house, a "market-clearing price" is somewhere between $425-399K.

We could have sold our house in 2008 for about 15K less than our last price. But now, if we had to sell this house rapidly? Our asking price would have to be tens of thousands of dollars less.

Rent it out and bring in some income from it, and remember that one marker of a true market price is monthly rent x140 (or 160). You could probably sell it at whatever that price is. The only cure for the current RE mess, is price. When the prices go low enough, the market will clear.

[cinnamon_toast]

We took a beating on our home when we moved, but we DID sell -- and relatively quickly. You have to stop thinking about your break-even or whatever other number you have in mind and price it to sell. Cut your losses and know you'll be getting a deal on the other end. Sell low, buy low.

One realtor described pricing in a declining market fairly aptly... It's like a chasing a ball downhill. You need to make sure you're below the ball to catch it. If you're above it, you'll be chasing it until it hits rock bottom.

I would price to sell before I'd consider renting. WAY too much added stress.

[oldtoiletsmkgdflrpots]

I agree with xladylawx. We still haven't sold the home back where we came from. Our first year here as a family it sat empty and we took a loss. We did get on offer to purchase. The price was less than what we paid for it ten years ago and we said no.

Then we hired a management company. Love them! The gal we have treats our home as her own. She rented it and we are taking a loss but compared to the last year not as much of a loss. Something is better than nothing in that regard. They do all the work, there is much less stress than having it sit empty. They deal with everything! And I won't even get into how much it costs to insure an empty home. The insurance companies will rake you over the coals. Hiring that management company was a smart move!

I feel for you. It's difficult on many levels. For me it was difficult to let go of that home and let someone else live there. Silly I know.

I wish you well in whatever decision you make. Don't give up, it will get better!

[G Grasshopper]

I know everyone keeps mentioning price, but we originally priced the house below the comps because we wanted to sell. Then, after 5 months, we took it off the market for a month to "reset" the MLS, and brought it back on for $30,000 less. Our realtor says that buyers are brutal now days, and will offer $75K or even $100K less than the asking price, and they also would like you to pay all costs and indenture your first born for 10 years. She says homes with drastically reduced prices still arent' selling. We would certainly be willing to come down if we had an offer, but no offers. We had one family that was very excited about our home, but couldn't buy because their house was underwater, and they couldn't afford to pay off their house and pay the down on ours. We've had 2 families who were interested, but never made offers because they could not secure loans, so they just quit looking. This happens over and over. From what I understand, the houses that have sold have gone to people from overseas who have cash. There is just a very tiny pool of qualified buyers. We don't and never have expected to get what it could have gone for 2 years ago, and I don't think we ever will. Unfortunately, the market in CA is not like the market in Austin; even a "firesale" has a small chance of selling a house.

[oldtoiletsmkgdflrpots]

Not to sound redundant but there is a huge demand for rentals. Leave the house empty for the critters and vandals or rent.

[hilsmom]

I definitely would rent out, because if things really aren't moving at any price, there isn't much you can do about it. You still can make your payments right now, as long as you don't add a second mortgage to your monthly bills, right? Renting, even if at a loss, is better than carrying 2 full mortgages on your own.

It isn't like a bank is going to approve a sale easily at less than what you owe, which I would consider to be "break even" price. In most cases, you have to come up with the difference.

It is really a sad state of affairs, as so many people are stuck with houses they can't unload even though the job is now elsewhere or whatever the situation might be. It is much better for buyers, but not many people are in a position to buy anyway.

I hope you find a reasonable solution - good luck!

[Exiled Texan]

Originally Posted by Jennibc

I'm not meaning to sound harsh, so please don't take it that way, but if your house isn't selling, it's overpriced for the market, it is as simple as that. We moved here without selling first and needed to take some time to ready the house before we put it on the market.

We started our house at what we'd hoped to get with the understanding that if it didn't get any interest we would start to aggressively lower the price. After two weeks we lowered the price and then we got an offer. Other houses in our old neighborhood were sitting but the houses that were priced right went reasonably quickly, including ours.

I don't know that you'd say our house went for "fire-sale" because it went for about 100K less than it might have, had we put it on the market a year earlier. We still got more than what we purchased it for in 2001. I think the problem is that houses were inflated so drastically mid decade, now more realistic prices seem like they are in fire-sale territory.

I think anyone trying to sell a house in what were once overheated markets are kidding themselves if they think prices will rise to where they were in 2007 within the next decade.

I agree with this. We were in your situation. Dropped our price by 20% and it sold. Cut your losses. Prices here are very soft too.

[ogun]

my wife bought a house in vegas for 314 thou, six months she sold it for 348 thou. that was three years ago. it sold again this past spring for 144 thou... after being foreclosed on.

aint no market.

glad my land is old family land and i roam around in an rv!

id hate to be caught like so many people are with a house that wont even sell for what you owe.

good luck to ya!

[rickc007]

That's why it's best to rent it out.

Even if prices don't come back, your renter is paying into your equity
AND you write off depreciation every year.

[eichlerfan]

I know renting out your home is a hard pill to swallow, but I don't think the market will be changing anytime soon. It's difficult to get a loan and just way too much inventory out there. We owned a house in the Bay Area and we spent most of '09 trying to sell the house. We spent most of that year chasing the market. We took it off the market in November of '09 and put it back on this past Feb. for a much lower price and a new agent. We did sell within that first month, but we still had to lower it even more when the appraisal came in too low. Also the new buyers credit was still available and that helped a lot. Like most of the buyers, these people had a lot of cash and so getting a loan was not as big a deal. Since then I've checked and our neigborhood has come down in price even more. We weren't underwater on our loan, but our house still came down in price a good 100,000 from the height of the market. We are now happily renting here in Austin and are in no big hurry to jump back into the real estate market. At least for now if you don't have cash to buy a home, real estate is not a great investment.