Here's one homedebtor's desperate rush to unload a rapidly sinking asset in the middle of the greatest housing crash of all time.
Funny when your home plummets $150,000 in value in 12 months and you still feel lucky to get rid of it.
It's called a Ponzi Scheme folks. And 25% off firesales are just the start. I feel sorry for anyone dumb enough to buy for such a small discount.
But then again a lot of people thought pets.com stock looked attractive at 25% off too...
The Mortgage Crisis Lost Me $140,000 - By Suzanne Barlyn, Special to TheStreet.com
The subprime mortgage crisis that dragged the country's housing market down this year hit our family's pocketbook in a big way. How big? We came up $140,000 short of our expectations.
Our home's value peaked at over $800,000 in 2006, nearly twice what we paid seven years ago (even we had commented on the absurdity of the home being worth so much). In that context, letting it go in the high $700,000s seemed fair. But we lowered the price another $25,000 after a few weeks passed with just a trickle of interest.
The process wore us down -- enough to tolerate a second price reduction, down to $749,900. But interest -- not offers -- was all we attracted as the "resale inventory" (other homes for sale in the same price range) ratcheted up to 15 in our community.
Some neighborhood houses, meanwhile, finally sold in the $680,000 range -- the first scary indication that we'd have to let the house go for less than we imagined. Our bottom line sales price of $725,000 was slowly slipping away, we realized, as we lowered the price yet again.
The chance to unload our house -- for $650,000 -- finally arrived in August.
October 29, 2007
Do I hear $800k? Nope? How about $750k? No? How 'bout $725k? Still no? How 'bout $650k? Yes! Oh thank god!
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27 comments:
LOL ... $800k today will be $400k in 1-2 years.
And yet most people I know back in Arizona still believe their house will triple from the peak 2005 values.
DOPES.
sad foreclosure suicide story...
"Hahn shot himself as officers closed in on his home.
Residents noted there had been a number of foreclosures in the neighborhood lately.
But none imagined that Hahn would take his life rather than leave a home that no longer belonged to him."
http://www.chron.com/disp/story.mpl/front/5244051.html
Not bad - bought 7 years ago for $400K, sold for $650K. That's a nice 7% return on the family home.
The great sucking sound will come from specuvestors / HELOC-ATM cowboys who are still holding on tight praying for a recovery. They'll be looking at negative returns for the next decade or more. That is, if they don't go bankrupt.
Our home's value peaked at over $800,000 in 2006, nearly twice what we paid seven years ago (even we had commented on the absurdity of the home being worth so much). In that context, letting it go in the high $700,000s seemed fair.
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This thought process is the problem. Here we have some dumb@$$ that has a huge margin of faux equity to play with, and who are aware of it at one level, and instead of drama pricing/leveraging the faux equity to sell the place, they think that if the peg the price at INSANE instead of ABSURD they are being reasonable. The result is that they are chasing the bottom!!! If they had pegged the price at 700k, the STUPID BULL TRAP price at the time, it would have been snapped up immediately. I am crying, not because they lost 150k they never had, I'm crying because this kind of perspective reveals just how stupid, ignorant and blinded by greed Americans still are, they honestly thought that they were being reasonable and feel we should feel sorry for them because the ONLY realized a quarter million profit on their cr@pbox after only 7 years of ownership.
FYI, You deserve no sympathy for your blind greed and stupidity that caused you only an insanely unjustified windfall instead of an absurdly insane windfall!! You are what is wrong with America and Americans.
Let's see! Paid 400K, sold for 650k, but took a loss !
I would like to take a loss like that every year for the rest of my life!
It's only on paper, IDIOTS!
Suzanne, Suzanne -
You didn't "lose" 140K honey YOU NEVER HAD IT!!
I finally sold my 800K fantasy for 650 in NoVA - AND I THANK GOD EVERY NIGHT!
My Realtor tells me that we got out just in time, now nothing is moving because no one in the old 'hood' will drop that low.
Just sitting & waiting & thinking it going to go up any day !
BTW - I still made a killing and it's all sitting in CD's & losing value everyday.
Thanks Ben
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Our home's value peaked at over $800,000 in 2006, nearly twice what we paid seven years ago....
The chance to unload our house -- for $650,000 -- finally arrived in August.
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Still made near $250K tax free. Well, take out 6%. ;)
Haha, I'm a realtor and this is the town I work in. ForEVER folks here have thought they were invincible because they have a train station and well-ranked schools. They are just now beginning to realize they're not. This woman hits the nail on the head though when she says she couldn't have done it had she been pulling equity out of the house since 2000...and many, many of her neighbors have been doing just that, which is why they can't afford to reduce to levels that would provoke a sale.
Funny enough, I bought practically the same house as this woman in 1998 for $369, sold it in 2004 for $650, and if I were selling it today I'd only get the same price. But what's REALLY funny is that it's the same house that just a few short years ago was considered "worth" $369...except now it's OLDER!!! (We did NO upgrades to the house in the six years we were in it.)
Even though it's killing my business, I am happy to see prices go down. We still have a huge affordability problem in New Jersey. This writer mentions she moved out of state. Almost EVERYBODY is moving out of state. Our prices and property taxes are ridiculous. And for what? Good schools? My kids went to the so-called #1 high school in the state (same one this writer's talking about) and I thought it SUCKED (but at over 50% Chinese and Indian, of course we had great SAT scores...)
COOL SITE, LOVE THE GRAPHICS/PICTURES. THANKS. DOWN WITH HOUSE PRICES.
She made 250k and is upset because she didn't make 400K? Yeesh.
- Signed, one of the little guys.
I'm no homedebtor apologist(I sold and now rent) but you introduced this article in a completely unfair way. Its one thing to be realistic which I think this site has done a great job.
Its another thing to go totally to the other extreme and call someone who low offered to get a sale and make a profit a homedebtor. The fact that some people are actually understanding this plummet should be applauded, yet you somehow totally misconstrued the significance of this article.
400K to 800K in a few, short years? And by the way, the morons overpaid by about 250-275K.
Plain and simple, homes are dropping below 2000 levels- Boo. Think about it, have we added that many more legal people to the population of the US since 2000 to justify the increases? How about wages, have they gone up that much? On the whole, are young people doing as good as their parents financially? I think not. Accordingly, given all the inventory hitting the markets via arm resets, builders continuing to add to the pile because they can and have to, and then, add to that the boomers sucking the life out of this country in a few short years and then finally taking their well needed dirt naps and this country is going to be swimming in inventory.
Yeah, and as the realtwhores always espouse that one should look at values over the long term- well, I have, and I cannot see values doing anything but falling off a cliff over the next 5-20 years.
AHHHH for $650,000. dollars!
Yes, I think I will be able to afford that now, thank you very much!
What is your stated income sir?
"Um,Let's see. My income is, well let's see, my income is, oh okay, my income is...
"How about $150,000?
Oh, okay, but lets make that $148,000 to make it look more legit!
"OKay, sounds good to me."
Now we have the necessary paperwork, you will pay a very low FIXED rate of 1 and 1/2 percent with a negative amortization for the first six months.
And afterwards, sir?
Dont worry about a thing. Your home value will appreciate and you will be able to refinance into another fixed or you can always cash out, whatever you want?
Thank you sir, you brokers are the best!
Yes, I feel we both do our job when we can fit you into a $650,000 dollar home that is really worth $800,000!
Cry me a river, just a 200k increase from what they bought at to what they sold at.
150/800 != 25% fyi
Catch a falling knife.
That's how to get rich.
Don't buy until real estate has been pronounced dead dead dead and prices have stabilized for at least a few years.
This is great stuff. Even in my 'non-bubble' area the s is starting to get close to htf. People I know are pissed that their 'investment homes' aren't selling. Whenever a house sells, people are asking 'who's the idiot that bought it, and how much did they get screwed out of?'. Median family income is only in the mid 40k range here, and I saw some local idiots on TV talking about the condos their currently building. They'll be priced at...get this....mid 500's to mid 800's. WTF? I guess not everybody is smelling what they're standing in.
but its only worth 150,000 cash.....
ditto 17 years no sale but property tax at highest evaluations and growing by 10 percent a year, suckers game all around, and yet i remember average wage if figured is 27,000.... made every year with average house ownership??? suckerpunched?????
creative financing made a 100,000 dollar house assessed at 1,000,000 worth 126,000, yet still i do not buy????????????/
DOPES...................
@ Anonymous and Frank:
50% off? You're not going to see 2000 price-levels. If that were to happen, banks would have to forgive massive balances/write-downs of "homedebtors". So in essence, what you're hoping for will mean taxes will be raised to forgive the debts of people like me, who called and shookdown their lenders. "So, since this house is worth 50% of what I owe, why should I keep paying this outrageous amount of $$ to you? You should clearly write-off/forgive the difference, or I'll walk away and not only will you lose 50%, you'll lose another 10-20% in sales/repairs/etc."
Minus the 50% number, I've already started working with my mortgage holder to negotiate down my balance, despite the fact that I'm even technically. Not only did they not scoff at it, they confirmed they're working on plans to address this on a more broad-scale in the next 3-6 months. First priority is the ARM-tools that /are/ actually about to lose their homes, so once they sort through that and they can see the forest through the trees, us folk that can afford our houses but that are becoming collateral damage get handouts - WOOHOO!
Haha, I'm a realtor and this is the town I work in. ForEVER folks here have thought they were invincible because they have a train station and well-ranked schools. They are just now beginning to realize they're not.
Now that's funny. The idiots I know in Scottsdale who are still betting that their houses triple from 2005 peaks argue that they have "nice shopping and restaurants." Gee, so does any city, in fact most are BETTER than what they have to offer.
I'm shocked that so many people are still in such blind denial.
She never lost a dime. Instead she made great money on the sale of her house. If she leveraged it upfront she made a killing selling it for $650,000. About the $800,000? Your house is only worth what the market is willing to pay WHEN YOU SELL IT. Not what you want for it.
GREED, GREED, GREED - that's why we are in this shape now.
Sorry, must be grumpy today.
I'm supposed to feel moved by this a$$wipes story? she still made a ton of money. Idon't even feel moved by all my Seattle friends who've been "losing money" as they chase the market down. Stupid. They're still way ahead. Let 'em all chase it down to zero for all I care.
For Halloween, I am going to dress up as Angelo Mozilo. I will visit local Countrywide offices and pass out KY lube and wristbands to all employees.
After realtors commission, they made about 5% annual return on their investment. How about the suckers who bought at $800K who lost all that money? Only the realtrolls and brokebacks won
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