November 28, 2005

Financial Ruin: First of many articles on homebuyers losing their shirts before moving in - Here's one from D.C.


Can you imagine losing $100,000 on an investment in a matter of months? Financial ruin because all you did was sign your name on a purchase contract? Oh, boy, there are going to be so many of these articles - on people who bought at the top...

Lynn Edmonds and his wife, Sebnem, could barely wait to sign on the dotted line back in May when they committed themselves to pay $796,000 for a three-floor townhouse under construction in Alexandria's Cameron Station.

But since May, the sales prices for the development have fallen -- and units like the one the Edmonds bought are now being sold for $699,900. The Edmonds are facing the prospect of a $100,000 loss in value before they even walk through the front door.

"We blithely stepped into the contract, thinking it would hold its value -- but that's not the case," said Edmonds, 46, a program analyst and Air Force veteran. "I feel so stupid putting myself into it. It's real estate -- I knew on a theoretical basis that it might go up and it might go down, but now I know it on a practical level."

4 comments:

skytrekker said...

so many have been sucked into this bubble- the tragedy in the end will be economic ruin for them. The hype, lies and manipulation are typical of any speculative frenzy- and its no different this time.

Tom said...

OMG LOL!

Look at what this real estate agent says OMG to actually hear it from an agent who tells the truth. We should get her something as a reward!

Real estate investor Andy Cabral has had a townhouse on the market at the Wheaton Metro station for 11 months, and though he has steadily dropped the price, it has not sold.

"It's now below the appraised value," Cabral said. "I'm really not happy."

His sister-in-law, Sandra Cabral, a real estate agent with Re/Max Pros in Kensington, puts it more succinctly: "He needs to get rid of it; it's an alligator eating all the money."

But she sees an upside to the situation, with good opportunities to make purchases cheaply in the future. "Within two or three years, there's going to be a whole lot of foreclosures, because with all of the interest-only loans, a whole lot of people don't realize that in two years their payments are going to go up."

skytrekker said...

tom

hearing that is uncommon from a realtor, most are programmed to tell the unsuspecting buyer to have no fear and purchase property, knowing its is overpriced. This lady knows for sure what wull happen when the IO and other exotica comes back to haunt.

skyler said...

I suppose you think the new home sales number (highest EVER) is a fluke?

I've heard way too much anecdotal evidence on this site.