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Old 06-14-2009, 06:45 AM
 
Location: Troy
14 posts, read 14,090 times
Reputation: 10

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I think now i have less value in my home than the mortgage i am currently paying.Do you all find yourselves in the same situation?This has got to be the most vicious cycle in my entire life.Losing all my life savings and forced to restart from zero.
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Old 06-14-2009, 06:53 AM
 
Location: Bay Area
111 posts, read 315,811 times
Reputation: 142
We are in tough time, but keep your head up....try thinking of the positives instead of the negatives:

1) annual tax deduction
2) still living in a place that you love (thats why you bought it)
3) be thankful that you still have a job to pay for your morgage
4) only direction the economy can go is up
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Old 06-14-2009, 06:55 AM
 
Location: Grosse Ile Michigan
30,707 posts, read 79,493,954 times
Reputation: 39441
We are upside down by at elast $70,000. Three years ago we had 55% equity. It is ogne.

But we love our house. I would not want to live anywhere else.
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Old 06-14-2009, 07:23 AM
 
Location: West Michigan
12,082 posts, read 38,752,925 times
Reputation: 17006
Quote:
Originally Posted by Monelli View Post
I think now i have less value in my home than the mortgage i am currently paying.Do you all find yourselves in the same situation?This has got to be the most vicious cycle in my entire life.Losing all my life savings and forced to restart from zero.
Tough situation to be in, but unless you are planning on selling right now, it really has no effect. Bear with me for a moment and see where I am going with that thought. When you bought your home, did you look at it, decided you wanted it and then offered more than it was worth to you and more than you could really afford? OR did you look at your home, decided you wanted it and offered what you felt the home was worth to you and your family and within your budget? More than likely it is the last case. In that case, take a look around now. Is it still the same home you bought? Is it still the same family surrounding you? Still the same location, neighborhood, amenities, etc...? If the answer is yes to these, then what do the numbers REALLY mean for the value of your home? Unless you are selling or refinancing the "value" hasn't changed, the appraisal has. In my case I would welcome a huge reduction in appraised "value" for our home. Lower appraisal, lower taxes on a home that is worth the same to me. I don't plan on selling anytime in the foreseeable future, and we didn't offer more for the home than it was worth to us, so the numbers on a sheet of paper REALLY don't effect me and my outlook on the house.

That said, we bought a lot of house for the money we spent. City appraisal DID go down this past year, but overall independent appraisal went up. "Value" of the home? Really couldn't tell you for sure, and unless there is a buyer waiting with financing in hand, it is irrelevant to our own mortgage, and the true value to OUR family.

If you are selling, your situation just flat out sucks. Good luck.
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Old 06-14-2009, 07:38 AM
 
47,525 posts, read 69,515,932 times
Reputation: 22472
Quote:
Originally Posted by MyPOV View Post
We are in tough time, but keep your head up....try thinking of the positives instead of the negatives:

1) annual tax deduction
2) still living in a place that you love (thats why you bought it)
3) be thankful that you still have a job to pay for your morgage
4) only direction the economy can go is up
I agree with all except the last. The economy can still go down.

In other generations people didn't buy homes because they thought of them as money-makers. They bought them to live in, raise a family in. At one time houses were an investment but not the cash cows they had become in the 90's.
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Old 06-14-2009, 08:29 AM
 
Location: Troy
14 posts, read 14,090 times
Reputation: 10
Listening to the media and people was the wrong thing to do.Renting proved to be recession proof,but with this large horror scale it is tough to predict anything.I think if other parts of america do not work out,i will expatriate.
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Old 06-14-2009, 02:00 PM
 
Location: Sparta, TN
864 posts, read 1,713,936 times
Reputation: 1012
I HAD to sell -- because I moved out of the state. When I purchased -- I thought the price was too high but ALL of the houses on the market were too high and the real estate people convinced me that this was simply the "market rate". They were technically right but nobody knew when the bubble would burst.

Friends and family were encouraging me to a buy a house because of the equity that I'd build in it (good investment), the tax deductions, and I'd no longer be flushing money down the toilet by renting. This might have all been good advice at one time but it was total crap for me. The only reason to buy a house is for quality of life issues. It's not a good investment -- even in good times. Real estate transaction costs eat at any equity build-up. Tax deductions simply reduce all of the INTEREST you're paying on your loans. Your house has to be going up in value enough to overcome the realtor commissions, the interest your paying on the loan, the upkeep costs, the property taxes, home-owners insurance costs, and the opportunity costs of investing the money elsewhere. There's also risk of the neighborhood changing for the worse dropping property values, and the house becoming an anchor keeping you from pursuing other career opportunities which may present themselves elsewhere.

People are more mobile these days and don't create a home in one location for 20+ years and work for the same employer their whole lives. These were the conditions in which home ownership was a wonderful thing. There were no 401K's, IRA's and other investment vehicles in which to build equity so the home was the best alternative thanks to the mortgage tax deduction and limits on how high property taxes could be raised per year. Things are not nearly as stable today so I don't think the renting vs buying thing is clear cut at all. I'm renting a house for the time being.
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Old 06-15-2009, 05:53 AM
 
168 posts, read 838,961 times
Reputation: 93
Can you get anything out of your house?
Sure....about 40% of what you paid for it.

Just kidding.

But seriously though,.........for those people that bought in the last 5 years,....the values will not get back to those levels for decades.

I lost over 70K (out of pocket) on my home I bought 3 years ago,....and in the 6months since I sold it, the value has gone down another 10K.

Being upside down is actually the majority position in the US right now.
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Old 06-15-2009, 07:36 AM
 
Location: Grand Rapids Metro
8,882 posts, read 19,793,803 times
Reputation: 3920
Quote:
Originally Posted by Dr.Jim View Post
Can you get anything out of your house?
Sure....about 40% of what you paid for it.

Just kidding.

But seriously though,.........for those people that bought in the last 5 years,....the values will not get back to those levels for decades.

I lost over 70K (out of pocket) on my home I bought 3 years ago,....and in the 6months since I sold it, the value has gone down another 10K.

Being upside down is actually the majority position in the US right now.
We actually built a home at the low end of our subdivision pricing, and then spent a ton on landscaping (so that it would fit in perfectly). It was also an area with a brand new elementary and high school in an already hot school district (Forest Hills). We just refinanced recently and our appraisal came in 10% higher than what we had the home built for 6 years ago (not bad). The last 3 homes sold in our neighborhood (used as comps) in the last 60 days were 60%+ more expensive than ours, driving our value up. Would our house sell for the appraised value? No, I don't think so. But we'd definitely get more than what we paid based on the sold prices I've seen in our area lately for comparable homes.

It's all about being smart and educating yourself in the housing market. I'd almost say it's worth it to pay to get your real estate license when thinking about buying a home. It's two weeks of classes, less than $1000 (if I remember correctly), and the knowledge you'll gain will more than pay for itself. Plus, you get access to the MLS (sold prices, listings, activity, reports, networking, etc..)

Or you can keep doing what you're doing and I'll see you guys on the other side.
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Old 06-15-2009, 07:40 AM
 
Location: On the brink of WWIII
21,088 posts, read 29,107,767 times
Reputation: 7812
Quote:
Originally Posted by Monelli View Post
I think now i have less value in my home than the mortgage i am currently paying.Do you all find yourselves in the same situation?This has got to be the most vicious cycle in my entire life.Losing all my life savings and forced to restart from zero.
It will all come around again...according to prejections, within the next 10 - 15 years in southeast michigan...
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