How's this for being "upside down"? (Manassas: foreclosures, loans)

[becwells]

I heard a story in my class last night that made me go ...

This guy put down $100k on his $320k home in Manassas when he bought it 3 years ago. Guess what it assessed as this year? $117,000. Good lord - I can't even imagine putting down a THIRD of my home price and still have it be upside down.

[VEIK]

So its almost paid off )))))))))))))))

[oneasterisk]

Originally Posted by becwells

I heard a story in my class last night that made me go ...

This guy put down $100k on his $320k home in Manassas when he bought it 3 years ago. Guess what it assessed as this year? $117,000. Good lord - I can't even imagine putting down a THIRD of my home price and still have it be upside down.

He should be happy his tax bill will be lower

[knopfler]

Next door neighbors in Manassas bought their 3 BR, 3 BA townhouse off I-66 in 2005 for $314,700. They got foreclosed on 2 years and 3 months after the purchase. It just went off the market ... at $112,000. It needs a little work but not more than 10k.

[Caladium]

Ouch.

[becwells]

Originally Posted by oneasterisk

He should be happy his tax bill will be lower

That's what someone said, but then it sparked up the conversation about how taxes probably aren't going to be that much lower, otherwise the counties will lose significant revenue.

Speaking of which, what does everyone think about this? Do you really think that we'll be paying less taxes this year, or do you think the tax rate will be raised significantly to compensate? How can the county survive if they're receiving a third of the taxes they received last year? I'm not sure exactly how the taxes work, and if there are limitations on when the tax rate can be raised (if it has to be at the start of the year, or if they can raises taxes mid-year). Anyone care to weigh in?

[becwells]

Originally Posted by knopfler

Next door neighbors in Manassas bought their 3 BR, 3 BA townhouse off I-66 in 2005 for $314,700. They got foreclosed on 2 years and 3 months after the purchase. It just went off the market ... at $112,000. It needs a little work but not more than 10k.

That's exactly the problem - there are so many houses going for so little in that area that it's dragging down his property value.

Honestly, I'm surprised our home hasn't depreciated as much. We live in South Riding, where so many people bought in the 2003-2006 time period, at the top of the market and probably with quite a few sub-prime loans. We've seen a couple of foreclosures, but not too many and certainly none that are selling for a third of the original price. Still, our home has depreciated, but nowhere near the $200k some homes in Manassas have - we're down about $50k (which blows, but we're counting ourselves lucky because it could be a LOT worse).

It's clear that in NoVA (and probably many other places), it truly is all about location, location, location.

Edit: One of the reason's we're underwater is because we didn't put anything down, but we did borrow under a convential, 30-yr fixed loan (our one redemption). Let the flames begin...

[cool rob]

Im sorry, but it is very hard for me to sympathize with anyone who would spend that much dough on a house, that was worth half of that less than a year prior.

It seems that common sense went directly out the window during the "bubble" years. People were buying like nobodies business, I remember my wife and I went to view an open house for a shabby little 3 bedroom in DC (possibly investment property), this placed needed a lot of work, and was priced high (about 200 K in brookland), the line to get in was down the block, including pushing, shoving and other rudeness. The realtor was even walking the line checking approval letters, as if to say, " if you can't get over 300 k, don't even bother"

I turned around and went home, the house eventually sold for 310 K due to "bidding wars", and since then the house has been foreclosed on, and is now priced correctly at about 160.

There was a frenzy, and a lot of people drank the proverbial kool aid, it is very hard to feel sorry for those jokers who went mad

[Caladium]

Originally Posted by becwells

It's clear that in NoVA (and probably many other places), it truly is all about location, location, location.

I think that's true. My neighborhood depreciated a little, but not all that much. Not even remotely to the degree that you describe. I'm truly sorry for home sellers in Manassas and for people there who may see their taxes rise, news like that is not good.

[becwells]

Originally Posted by cool rob

Im sorry, but it is very hard for me to sympathize with anyone who would spend that much dough on a house, that was worth half of that less than a year prior.

It seems that common sense went directly out the window during the "bubble" years. People were buying like nobodies business, I remember my wife and I went to view an open house for a shabby little 3 bedroom in DC (possibly investment property), this placed needed a lot of work, and was priced high (about 200 K in brookland), the line to get in was down the block, including pushing, shoving and other rudeness. The realtor was even walking the line checking approval letters, as if to say, " if you can't get over 300 k, don't even bother"

I turned around and went home, the house eventually sold for 310 K due to "bidding wars", and since then the house has been foreclosed on, and is now priced correctly at about 160.

There was a frenzy, and a lot of people drank the proverbial kool aid, it is very hard to feel sorry for those jokers who went mad

First of all, how do you know it was worth "half of that less than a year prior"? I believe it was a new home, so I doubt it was worth $150k the year before. Unless you mean a "year after"...

Secondly, I don't think $320k is a high price for a home in the NoVA area. Not at all. Nor do I think it's now priced correctly at $117k - I think that's ridiculously low, and to suggest that $117k is an accurately reflection of the cost of homes in NoVA is ludicrous. It's a desirable area, and the prices of homes are generally higher to reflect that. If you don't want to pay that, move elsewhere.

To call him a joker for buying a $300k home, AND putting down a whopping THIRD of the price, is ridiculous. Seriously. His story is one of the most responsible one's I've heard, and I DO feel sorry for him because his position has been decided for him by the people around him.

I don't feel sorry for people who purchased beyond what they could afford, but to call people who responsibly bought a $300k home in this area "jokers" is just plain ignorant.