I (kinda) understand bubble-aware homeowners who bought years and years ago not selling - sure you missed out on nice paper profits by holding on, but hey, you need a roof over your head and you like your house.
Me, I would have considered taking the profit last year and renting for a bit, only to buy back my own house perhaps for much less than I sold it for. Oh, wait, that's what I did do...
Paper losses can be just as painful as real losses. They sure make you feel less wealthy just the same. Especially soon-to-be-retirees who could have walked away with what likely was their largest holding - more than their 401k or pension (if those still exist).
So for the housing-holders, let's hear it. And even if you regret not selling at the top, are you considering it now? And did you also ride your dot-com stocks all the way up, then all the way down?
July 05, 2006
HP homeowners - why didn't you sell knowing what you knew, and do you regret that you didn't?
Subscribe to:
Post Comments (Atom)
20 comments:
yes...We had bought a San Diego condo (townhouse) in 1995 for 135k in 2003 we bought a house in Coachella valley (2 hrs from San Diego)for 186K, refi's the townhouse and paid the coachella cash. then in 2005 sold the s.d. Townhouse for $455k...got a paid for new house and 135K left over..nuff said
I wanted to sell my oversize house bloated with beany babies, toys and color-coordinated curtains; but my wife wouldn't leave "the island." "Only redneck hillbillies live west of the Hudson" she would harp. Besides, everyone wants to live here and look how much our home is worth honey - you're so smart!" kissie kissie, she primped and smooched. So, I acquiesced to my bride, and suppressed my sense of forboding at young couples with total gross incomes of $90,000 buying homes for $900,000 with $15,000 per year in property taxes. Now, home, I hava no home. The market has tanked and home prices are dropping like so many dead flies, and I am upside down on my mortgage plus HELOC. My wife had her ATM card frozen yesterday and now she hates me. She said a real man could make her happy - that I was a little weiner, and she kicked me out of the house, which is in forclosure. What's worse, nobody bid on the Beanie Babies on Ebay.
Here I am living, like an animal. The jungle is my home..."
Our house is "up" 30% since we bought it in '02. Do I believe the appreciation is real or is "money" in my pocket? Hell no, and when prices drop and interest rates shoot past 10%, I'll still have my home because I locked in 5.25% on a 15 year note. We have no other debt and plenty of savings in the bank, CDs, and gold/junk silver.
The multiple offers we receive each week for HELOCs and ARM refis go straight to the trash.
Keith,
Although I enjoy your insightful links and stories, all this gloating is unbecoming of you.
I would encourage you to take the higher road and continue to stick to the facts.
As for my personal situation, I continue to happily own my San Diego home. Although my wife and I considered selling in June 2005, the end result was staying put for family reasons. The security and foundation built for our children cannot be measured in mere $.
Instead, we have paid down debt and braced ourselves for the coming storm. I leveraged my overpriced home via a 200k HELOC to short homebuilders. This financial hedge continues to pay off handsomely.
I enjoyed reading the following blurbs on page 124 of the current July 10, 2006 issue of Fortune magazine:
"Okay, we were wrong last August when we said the worst was over for homebuilder stocks."
and,
"Housing starts have already shown signs of bouncing back"
So, the MSM continues to paint a rosy picture, while you continue to provide a valuable public service illustrating the counter-points.
Keep up the good work, but please don't be so arrogant about it. It just makes you look bad.
- prof_investor_40
I just sold my overpriced POS home in Riverside. Purchased for 215k in 2003. Sold in 2 weeks for 435k. Just moved in to a new condo the size of the old house and brand new for less than my mortgage payment was. Waitng for the dopr to buy back in a more desirable neighborhood. OC here I come!! Who said last summer was the peak?
asking the question isn't gloating
I have posted before, summary:
- Bought in 1998 a beautiful house I love for $510,000, and after a few years, paid off the mortgage and now own it outright.
- Have kids, and in the best school district in the area, but taxes cost me. Live near a major employer with high paying jobs, still hiring, and at least in a growth field in America.
- Have other investments worth a couple times my houses value, so even a major crash in values, I can ride it out, even if work/business/family forces me to move the the lowest point.
- If I sold now (or last year), I would have made $400k-500k profit, and if I had no savings and a job at risk, this would be very compelling. But since I have savings outside of the house, and not mortgage, I am willing to leave the chips on the table....
- Because, if I sold, what would I buy? I did the rental thing before, and don't want to at this stage of my life. Not ready to move to a rural area yet either.
What's the point? I live in Pittsburgh. My house has appreciated at an annual rate of around 2%. But, I've noticed some sellers in the area who must be thinking that Pittsburgh has magically transformed itself into Malibu.
If my house drops in value, it's not enough to offset the hassle of paying commissions, closing costs, fees and moving costs. And, I've raised my family here. We're comfortable. We would miss this house.
The point is if you sell high (now) you will be taking advantage of one of the few opportunities to make a huge amount of profit in one swoop. I am talking minimum 200k plus equity for most folks here in CA that bought 3years ago or more. I just sold my home in SoCal and pocketed 400k. Paid off all my debt ,renting a house newer than my old one. When prices come down (2-5yrs?) I will buy back in, be debt free and have awad of cash in the bank. A better financial situation for me and my family.
C'mon Keith,
"I TOLD YOU SO"
"Oh, wait, that's what I did do..."
definitely gloating
- prof
Wait a minute - isn't this a teeny bit hypocritical? I thought people who viewed their houses as investments are supposed to be selfish and evil and destroyers of the economy. But here you are, implying that anyone who still owns a home is stupid because now they're losing equity. So EVERYONE should consider their home to be nothing but an investment, and should have sold to some other sucker during the peak of the bubble, and now should be renting until the bottom drops out of the market. This is kind of a mixed message. I, for one, hate renting because I feel like I am buying a home for my landlord rather than myself, and I want to be able to decorate, improve, landscape my own house how I want. I own my house outright, I love my house, I am not planning on moving for a long time, maybe never. And no, I don't regret owning a house. I would say if you know you're going to move every year or two it makes more sense to rent, but otherwise, if you are looking to put down roots and become part of a community and live in the same place for a long time - why NOT buy a house?
Sold my house in palm beach for a 330k profit and moved to an awesome lake that was way under valued. It has gone up from 295 to over 500k in 11 months, not a bad profit on this one either.
You can still buy RE in under valued area's and not worry about taking a big hit. Florida is probably the worst state in the country to own RE now with their tax laws and their house insurance going up.
I sold my house in 05 that I had purchased in 04 for a 50% profit. Packed the family up and moved into a nice high rise condo worth 1.2M that we were able to rent for $400/month. 1 month after moving in I stumbled upon this nice mcmansion that had fantastic views. The seller had to liquidate immediately due to some other RE deals that had gone sour. purchased it for 20% below market. Packed the family up again (yet a different school distric) and moved in. Was able to put 70% down on this bad boy. a month later I got an unsolicited offer for 30% more than we paid. we accepted and I packed the family up yet again to move into this jammin 1.8 million condo with a view of the ocean that we are renting for $600/month. The building is basically empty due to the fact that most of the units were purchased by flippers (gotta luv those RE speculators!). The kids are struggling in school and haven't made a friend yet this year and complain that there aren't any other kids in the condo complex, but I tell them to f*cking suck it up because we can now afford any college they wish to attend (they are in the 2nd and 4th grades).
I now have my eye on our next move. Going to make a low ball offer next week. The wife says she would like to stay at our current location at least until summer is over. She also complains that it would be nice to stay a while at one location so that we could actually be part of a community. She will change her mind once she sees this next place!
Prof, shut the F up brother! Housing prices can only go down from here. Any fool can see that. If you can't see it, well then come to my Southern Chandler neighborhood where asking prices are 70K less than they were as little as 6 months ago. And they still aren't selling. Supply and demand brother. Any prof worth his salt would know Econ 101. Keith don't have to gloat. I'm gloating! I sold high and waiting a year for the market to crap, so I can buy my house back cash!
Until yesterday, I was a fan of HP...
OPEN FOR SUGGESTIONS . . .
I'm not RE savy, just your average homeowner, and this is my first time posting on any blog, but I'm so glad to have found this site and become more informed on "the bubble" the associated financial crisis it looks like our country is headed for.
We moved into our current home in Reno, Nevada in May of 2002. We paid $267,000 for it and at the time we we're in sticker shock because my husband had just finished his schooling in Oklahoma and we had just sold our first home there, which was not much smaller in size, for $100,000.
Little did we know how fortunate we were to get it at that price and how completely out of hand things would get.
The home was new, but not very large since my husband was starting a brand new business and we had to do some creative financing just to get into it since he did not yet have two year's business history. (We have since refinanced at a 15-year fixed of 4.99% with 12.5 years left).
I have been itching to move for about the past two years, just for more space. Had a third baby join our family (a little unexpectedly) just over nine months after moving in and the older they all get, the more cramped I feel.
My husband, being the more level-headed of the two of us has been saying all along -- "we need to wait, things are gonna crash, things are way overpriced." I'm glad now he didn't give into my nagging. Sure we could have made a great profit on this one, but I would have had him turn around and buy something bigger at the peak! Yikes!
So now my delimma is, do we sell why we could still make a pretty decent profit? (We could probably sell for about $450,000 right now.)
My concerns are: A) do we want to pay rent to someone else for who knows how long, when we could just continue paying down our own at a great rate? (I sorta agree with a previous poster who said they hate to pay someone else's mortgage when they could be paying there own, but I could probably rent a larger house and solve my space problems.) B) If we do sell, what do we do with the profits while waiting to repurchase? Not feeling very confident in banks and/or the stock market with the way it looks like things are headed for our country - i.e. a recession/ financial collapse.
C) We've also been considering using that $$ to pay off my husband's SBA business loan. It's the exact amount we would make on the on the house (about $250K) & unfortunately, it's on an adjustable rate (10% right now) and rising. He has five years left on it. We would actually be making a loan to the business could charge interest too.
Any advice appreciated. . .
Hello, Open For Suggestions. This is me, the poster who said they hated renting. However, if I were in your shoes, and if you really think you can make that much of a profit, and if the real estate market in your area has inventory piling up and taking much longer to sell - if it were me I would sell, rent for at least a year, and wait for house prices to drop, and then try to get something bigger and more suitable for a song. The real estate market in the past has always been cyclical, and it seems as if we are at the beginning of a down cycle right now. The reason that I am not trying to sell my house right now is that I love my house, I am happy with my location, I like my neighbors, my house has plenty of room, I hate the expense and hassle of moving. But if my house were too small and I thought I could sell it for a big profit I absolutely would, because I think the market is only going to get worse for at least the next few years, and this would likely be my last chance to make a big profit off the sale of my house any time soon.
Hey Fellow, you have a top-notch blog here!
If you have a moment, please have a look at my make money with surveys site.
Good luck!
I am here because of search results for blogs with a related topic to mine.
Please,accept my congratulations for your excellent work!
I have a bad bankruptcy credit loan personal site.
Come and check it out if you get time :-)
Best regards!
Hi there Blogger, a real useful blog.Keep with the good work.
If you have a moment, please visit my bad business credit loan personal site.
I send you warm regards and wishes of continued success.
Post a Comment