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Author Topic: The Real Estate Collapse Illustrated: Our Old House  (Read 28845 times)
jonesey
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« Reply #15 on: March 15, 2012, 2:21:25 PM »

There is no way the current owners will ever recoup what they paid for it.

Uh, yeah, welcome to my world.  Florida.  Bought in mid-2006.  House is now worth $130,000 less than I bought it for.  I will never, ever, ever recoup what I paid for it, unless the government comes to its senses and forces banks to reduce the principle on underwater mortgages, I'm out of luck.
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parispundit
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« Reply #16 on: March 15, 2012, 3:54:25 PM »

oh, you probably will get back what you paid for it, in say 15 years and with a little inflation. Now, get back what yo0u paid for it in inflation-adjusted doillars? That's hopeless.
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grasshopper
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« Reply #17 on: March 18, 2012, 7:48:42 AM »

I kept the approval to $200K, though my new salary can support nearly twice that (in theory, according to one of those mortgage calculator thingies--what a joke!) and the houses that look most appealing to me are under $150K. 

Those mortgage calculators are terrifying. I qualify for a mortgage with payments up to half of my take-home salary. And this for a single-income home, with a mountain of student loan debt. Even if I bought a house at that price, could you imagine the upkeep on a property that large?
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shamu
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« Reply #18 on: March 18, 2012, 1:37:42 PM »

On the upside, if one were to save about 5 years of gas money, one could buy the old place. With about $4 gallon and the average 2-car family driving about 24k miles a year and the average car getting 22.5 miles out of a gallon, you spend a $22k on gas in a little over 5 years.

Trouble is, house prices will rise (eventually) driven by rent prices. Can anyone say stagflation?
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larryc
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« Reply #19 on: March 18, 2012, 1:43:50 PM »

I kept the approval to $200K, though my new salary can support nearly twice that (in theory, according to one of those mortgage calculator thingies--what a joke!) and the houses that look most appealing to me are under $150K. 

Those mortgage calculators are terrifying. I qualify for a mortgage with payments up to half of my take-home salary. And this for a single-income home, with a mountain of student loan debt. Even if I bought a house at that price, could you imagine the upkeep on a property that large?

Plus, if you tell a real estate agent that you qualify for a $200k mortgage he will immediately begin showing you homes in the $250-300k range. The entire system is set up to encourage you to buy beyond your means.
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marigolds
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« Reply #20 on: March 18, 2012, 3:56:59 PM »

I kept the approval to $200K, though my new salary can support nearly twice that (in theory, according to one of those mortgage calculator thingies--what a joke!) and the houses that look most appealing to me are under $150K. 

Those mortgage calculators are terrifying. I qualify for a mortgage with payments up to half of my take-home salary. And this for a single-income home, with a mountain of student loan debt. Even if I bought a house at that price, could you imagine the upkeep on a property that large?

Plus, if you tell a real estate agent that you qualify for a $200k mortgage he will immediately begin showing you homes in the $250-300k range. The entire system is set up to encourage you to buy beyond your means.

I can't believe they haven't made this BS illegal yet.

And Jonesy, I'm sorry about your house. That sucks.
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ideagirl
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« Reply #21 on: March 18, 2012, 5:03:57 PM »

Plus, if you tell a real estate agent that you qualify for a $200k mortgage he will immediately begin showing you homes in the $250-300k range. The entire system is set up to encourage you to buy beyond your means.

The only way I can see that making sense, from the realtor's point of view, is if the local market is such that homes listed for $250-$300k are likely to go for $200k or less. A realtor can't sell you a house that costs more than the mortgage you qualify for, and the only way a person who qualifies for $200k could buy a $250k house is if hu happened to have $50k cash lying around to make up the difference.
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schoolmarm
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« Reply #22 on: March 18, 2012, 9:46:36 PM »

Typical in this area, you bid at least 10% less than the list price.  Sometimes more, as it is that bad for sellers around here.  Thus, a 250K house is technically IN a 200K mortgage range, with a WEE bit of a stretch and assuming a healthy downpayment.

I have seen houses halve in price in the 8 months that I have been looking. 

Getting ready to bid on a foreclosure as soon as the house I'm selling closes.

The Real Estate racket is crazy right now!
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cyano
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« Reply #23 on: April 15, 2012, 4:35:47 PM »

I feel your pain. I bought a fixer-upper, 6 years ago. It's very small (<500 square feet) and the plan was to live in it for a few years, pay down the mortgage and then use it as a rental when I bought a bigger place. My house value (about $90 K) is now 30% of my mortgage (about $260 K). I'm so far upside that I will be living in 500 square feet for many years to come. Sometimes I wonder if it's worthwhile continuing to put in sweat equity. And yes, I probably didn't make the wisest financial decision, but that's hindsight.
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parispundit
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« Reply #24 on: April 16, 2012, 2:29:50 AM »

I feel your pain. I bought a fixer-upper, 6 years ago. It's very small (<500 square feet) and the plan was to live in it for a few years, pay down the mortgage and then use it as a rental when I bought a bigger place. My house value (about $90 K) is now 30% of my mortgage (about $260 K). I'm so far upside that I will be living in 500 square feet for many years to come. Sometimes I wonder if it's worthwhile continuing to put in sweat equity. And yes, I probably didn't make the wisest financial decision, but that's hindsight.

If the house is really only worth 30% of your mortgage, it is time to walk.
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oldadjunct
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« Reply #25 on: April 16, 2012, 3:03:22 AM »

I feel your pain. I bought a fixer-upper, 6 years ago. It's very small (<500 square feet) and the plan was to live in it for a few years, pay down the mortgage and then use it as a rental when I bought a bigger place. My house value (about $90 K) is now 30% of my mortgage (about $260 K). I'm so far upside that I will be living in 500 square feet for many years to come. Sometimes I wonder if it's worthwhile continuing to put in sweat equity. And yes, I probably didn't make the wisest financial decision, but that's hindsight.

If the house is really only worth 30% of your mortgage, it is time to walk.

That is not a house, at best it is a studio co-op in a major metro district. Some properties are recovering, mine comes to mind, not that it matters to me since I have no plans to sell this 1,600 square foot place till they carry me out toes up. But 500 square feet better be in the Back Bay. central SF, or Chicago because it it sure ain't in NYC.
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infopri
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« Reply #26 on: April 16, 2012, 3:07:53 AM »

Larry, I'm sorry to hear about your old house.  I drove by my old house in Tenure Town some years back and the gorgeous old oak tree that shaded the south side of the house had been removed.  I know for a fact that it was perfectly healthy and that no storm had damaged it.  The new owners are just morons.  Well, I guess they aren't "new" owners any more, as I sold the house in 2006.  But still.  I had worked mighty hard to make a wonderful garden and attractive interior, including remodeling the south-facing bathroom so that the dappled light from the oak in the summer would be reflected in the wall paint and tiles.  Sigh.

A woman who is now a dear friend bought the house next-door to mine in MyCity (which is how we met), and she put a huge amount of work into it, turning it from a crumbling (and very badly decorated) relic into a beautiful home and garden.  She did most of the work herself, and the results were just beautiful.  She eventually had to leave, though, and she sold the house to morons similar to yours.  They removed a beautiful and completely healthy cedar (the canopy of which just happened to dominate the view out of one of my study windows--and kept the sun from blinding me), dug up half the garden in the front, and generally have not taken very good care of anything.  The former owner comes over to our house for dinner frequently, and she just about cries when she sees what they've done to her former property.
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cyano
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« Reply #27 on: May 13, 2012, 12:40:23 AM »



If the house is really only worth 30% of your mortgage, it is time to walk.

That is not a house, at best it is a studio co-op in a major metro district. Some properties are recovering, mine comes to mind, not that it matters to me since I have no plans to sell this 1,600 square foot place till they carry me out toes up. But 500 square feet better be in the Back Bay. central SF, or Chicago because it it sure ain't in NYC.

It is actually a house and there are even smaller houses than this where I live. This might out where I live, but it's not a city at all and is one of the pricier places in the country. I've thought of walking away, but the cost of rent for a studio apartment would be about the same as my mortgage and I like having a yard and no landlord.
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anakin
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« Reply #28 on: May 13, 2012, 2:52:41 PM »

I have two old houses now.

I bought my first house in Tundra City in 1999 as a well-paid techie-geek. It was $79K, a small house, 960 sq. ft. with a 600 sq. ft. footprint, and it needed updating really badly, but it had a newer furnace, new roof, and new energy-efficient windows - really good bones. For the next two years, Boyfriend (who was a carpenter) and I renovated the place. My very first job was rewiring the whole house. For real. The night I moved in, I turned on the pendant light in the living room and smelled smoke. I poked my head up in the attic and found knob-and-tube wiring that was fabric-wrapped. The estimate for rewiring the house and upping the service from 60-amp (!!) to 120-amp was $3000. I didn't have that, but I had access to the snake that our network wiring installer at work used. So I borrowed that for a weekend, went to Home Depot and bought a new panel box and 400' of 12-gauge wiring (way overkill) for less than $500 and spent a weekend meticulously pulling wire. I learned to frame, insulate, plumb (sweating a tin bead is FUN! Cutting out a 50-year-old wastepipe = not so much), hang drywall, sand hardwood floors, dismantle the remnants of the giant octopus heater. Our culminating act in the great renovation was a complete gut and replace of the bathroom (down to rafters, including new plumbing and fixtures) that was so well-planned we did it in 2 days. I put in a privacy hedge, pulled two ancient overgrown junipers pretty much by hand, planted a garden, installed a garage-door opener and countless other jobs. I sold that house for $160 at the top of the market, in July 2006, when I defended and moved to Large Southern City. Oh, how sad I was to leave that home. It sold again a couple years later for $130K.

Fast forward 2 years when I move back to Frostbite Falls. I bought a new construction for $200K, and last week I sold for $167K. And I was lucky.
« Last Edit: May 13, 2012, 2:53:39 PM by anakin » Logged

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marigolds
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« Reply #29 on: May 13, 2012, 4:49:13 PM »

Dude. Come live with us next year and teach me how to do all that stuff. I want to be all self-sufficient and badass like you and Bioteacher, who are my home reno role models.

Plenty of schools who want fab science folk around here, too. And Sprout is quite a draw! And I have very nice cookware and knives... *dangles local restaurant supply house flyer in Anakin's face*
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They are our servants.  They are like dogs.  Sometimes, they think they remember being wolves, but they are only dreaming.
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