Sorry Olive, you'll have to start bobbing your own hair

[bobemm]

I know it's tacky to talk about money, but - some people down the street who have been trying to sell their house for a long time just dropped the asking price to $75k. The house is bigger and nicer than mine, so IMHO this effectively makes my house worth less than $75k. And I owe waaaay more than that on it, so at least on paper this puts me in an ugly spot.

This makes me sort of bitter since I was always told that real estate was a particularly safe investment. I've also been a real good boy wrt retirement savings and such, which have also been shrinking as I continue to pour money into them. So I feel like I've been doing what I'm supposed to do to be responsible, but I'd have been better off paying rent and stuffing the remaining cash under the mattress.

I know the Great Depression started with a bang, but would it be possible for the next one to start with a slow, quiet "ohhhhhhh dammmitttttt"?

Here is the most disturbing part of it - in the midst of thinking about all of this, I still find myself relatively calm and content. Crazy!

Comments

[misanthropicsob.livejournal.com]

You invested in Real Estate...

in Michigan.

You're supposed to invest in an up and coming state, not a down and sinking state.

[chucknoblet.livejournal.com]

shh it was still supposed to be safe

[thafuzz.livejournal.com]

Uh huh...that's what the last babydaddy told me. Nine months later I'm popping one out in the Quik Stop unisex bathroom...

[chucknoblet.livejournal.com]

It's not my fault that you don't use protection when you trick for cash :(

[thafuzz.livejournal.com]

You said the tube tying surgery you performed on your kitchen table was a success!

[chucknoblet.livejournal.com]

mmhmm and you paid me for it. Sucker.

[pebbles-patio.livejournal.com]

It sux to sell right now Chucky, but if you want to upgrade, there are lots of deals out there. =)

xoxo,
pebs

[chucknoblet.livejournal.com]

That is my plan - once I accumulate more cash (which I'm doing better at than I thought I would) I will buy my next house and hope that I can carry them both until I can sell this one. But that could be a few years :(

[jr-red.livejournal.com]

houses selling below assessed values are a red flag to assessors and result in re-evaluations that can reduce your taxes.

ok, so that's really the ONLY plus side.

[chucknoblet.livejournal.com]

even that's kind of scary though - Ypsi is already very much in trouble financially, lower taxes mean more trouble for the city (which as a side-effect I'm sure lowers property values). So I wouldn't be happy about that either.

[jr-red.livejournal.com]

stanton's not in any financial bind, so the considerations are different. i'd be ok if my property value was cut in half, but i also only borrowed 25% of it's value. i guess i can't relate.

i've got a round metal patio table up here though if you ever wanna get away and relieve some stress.

[chucknoblet.livejournal.com]

bahahaha - that would be a nice change of pace from the plastic one I'm used to. (not really though, I don't actually have a picnic table, I swear).

I borrowed 100% to buy this house :( And then after I put a ton of work into it I had it re-appraised and borrowed more against that value to do the kitchen. But now I have it paid back down almost to the original amount. Which is still way higher than what it is apparently worth. Argh.

[fj.livejournal.com]

Both are safe investments... over time. In a short time-frame, real estate and stocks are medium-risk investments.

[chucknoblet.livejournal.com]

Yes, the rational voice in my head tells me to shhh and wait, the cynical voice tells me that it could be a looooong time before things improve.

[the-macnab.livejournal.com]

For better or for worse, that cynical side isn't necessarily wrong. The "housing prices always go up over the long run" argument is sometimes as trite and stupid as the "housing prices always go up" argument. We can all pick neighborhoods off the top of our heads where the entire value of the neighborhood crashed and stayed low for decades: most of Detroit, Petworth and Shaw in DC, Harlem, Newark, East St. Louis, a lot of first-ring suburbs like Linden and Rahway...the list goes on. In such places the rise in the general price level has meant that the investment grew over time, but that's cold comfort to someone who waited decades. Didn't Keynes say something about the long run?

Sorry to be a downer. I'm just saying that you aren't totally stupid to have your doubts.

[chucknoblet.livejournal.com]

Thank you...I...I think....T_T

[brendand.livejournal.com]

I honestly don't know much about it, but there's talk that people can write a letter telling their mortgage companies that they owe more on their homes than it's worth, and they don't want to have to take the house and sell it, so in the long run, it's better for them to just write off part of your debt, and only make you pay a portion of it. Even if you only get it reduced by like 2 percent, isn't that worth a little time looking into it? (I seem to recall it was more than that, though... something like 10%, but then, it was relative to the amount that it's worth.

I don't even know if that made sense, but I'm still off a little today.

[chucknoblet.livejournal.com]

no it totally makes sense and I have heard something like that too. I just don't know what the ramifications would be. But it's definitely worth checking out. I think I could make an argument that it's worth 30% less than I owe on it.

[brendand.livejournal.com]

It costs them a lot more to have to try and sell it on the open market, and they'd get less for it, since they don't want to just sit on it, so you could definitely make the argument that you should be paying 20% less. Also, you could refinance which should get you a lower interest rate and significantly lower payments.

[brendand.livejournal.com]

And I don't think it's tacky to talk about money. We're not our grandparents, Thanks be to God.

[cowboymarine.livejournal.com]

Michigan has one thing that the southern states don't have.


(a huge fresh water supply)

fuck 'em, they will move back when they get thirsty.

[chucknoblet.livejournal.com]

bahaha it's so true. That could be awhile though.

Have you ever seen the movie "Tank Girl"?

[cowboymarine.livejournal.com]

I see all movies with Ice-T in them.

[chucknoblet.livejournal.com]

BAHAHAHA!

[mrpunk2u.livejournal.com]

dang where do you live??

PO-klahoma or PO-hio?

[chucknoblet.livejournal.com]

PO...chigan? The economy here is getting pretty ugly, more so than average I think.

[peccavo.livejournal.com]

Okay, so they lowered their price to 75,000. That may reflect them rather than the real estate prices. Why so desperate to sell? Did they over-extend? Are they having troubles keeping up with mortgage payments? Have they fled the area to Colombia, and are selling it at fire-sale rates through an agent (and yes, I did see a house like this).
Right now is a bad time to sell-- and if you can afford to wait it out until good times, the better for you. That's sort of how capitalism works; the people with capital can muster by through the bad times, and come out ahead later because they have a head start on the new boom. Not allowing the lower classes the chance to do this by means of discriminatory structuring is how the rich have gotten richer and the poor poorer over the past 30 years.

[chucknoblet.livejournal.com]

I haven't seen anybody at the house for a long time, so I'm assuming they did get a house somewhere else. They started at about $130k, and have been consistently lowering. This jump was from $100k down to $75k, so I think they must be getting frustrated. But still, if you have to go that low to sell, that sort of becomes the value of the house.

I definitely can and will hold on to this one, even if I end up buying another one. So I must be the rich person!!! :-D

[peccavo.livejournal.com]

A more reasonable response would be to try to rent it out through an agency until a time comes along when they could get a price they liked. It's better to take the house off the market rather than do what they are. They must be hemorrhaging money from a mistake somewhere. Don't let it discourage you too badly.
Yes! You get to be the rich land-baron wealthy elite. Good for you!

[qmrf.livejournal.com]

1. The value of your home from day to day doesn't matter so much. It only matters the day you buy it, the day you take out a home equity loan, and the day you sell it. (Well, and the day every year when the assessor calcs your taxes.) In the meantime, the value of the house is the value you get from living in it; the "market value" is pretty meaningless.

2. Even if the "market value" of your home drops below the amount of your loan, the mortgage company will not call your loan. They absolutely do not want your house, and will do anything they can to keep you in the house and making payments.

3. You were told real estate was a particularly safe investment. Well, sure - but no investment is truly "safe". It's like sex, really. Safer, but never totally safe. And it doesn't help that a lot of the people telling you it was a bulletproof investment were the financiers who were trying to get into your figurative pants at the time.

[chucknoblet.livejournal.com]

Yes but it matters now because I want to get rid of it nowwwww *whines*

MURPH WHY AM I CRAZY? :-D

[dakus.livejournal.com]

wow, tha's cheap.

about half median $$ here.

and we're still building here too.

[vertigo-xpress.livejournal.com]

It's tacky to talk about money? What is this, a dysfunctional family reunion?