How's this for being "upside down"?

[oneasterisk]

Not all flippers have left the playing field. There is a house in my neighborhood that was a foreclosure and purchased for 110k. A company bought, renovated it and now it's back on the market. It had a contract in about 2 weeks. List price was 249k, then for whatever jumped to 265k. It's under contract, but no clue on what the terms are. Flippers are still out there, and it appears (at least in this case), there is still a market for their product.

And can we all please stop talking about urine - LOL

[cool rob]

Originally Posted by becwells

Agreed. Cool rob had said that the house was only ever worth the $117k it's valued at now, and I was disagreeing because 3 years ago when it was purchased it was worth much more. I agree that now it's only worth $117k, but I think that that's unfortunate for him because he did everything right - large downpayment, took on a mortgage he could afford - and now has to pay for others mistakes. Although, he doesn't have any intention of selling at the moment, but one never knows what will happen and if he has to sell he'll take a large loss.

No, I said:

"So your telling me, that if a house was for sale in 1998 for 150 k, in 1999 for 155k, then it doubles in less than 3 years to 300 k, that you don't smell BS? True 117 might seem low, but I guarantee you that it is closer to the actual value of than house, more so than 300. Nothing legally acumulates wealth that fast, and if it does the bottom at some point will have to fall out."

In other words, he over paid for the house. The house is truely worth between 180 - 220 K (based on average levels of inflation, etc), It was not then and will probably never be worth what he over paid for it (not for a long time at least, once again if a house accumulates between 5-10 K a year, how long will it take that house to get to 300 K, probably about 15 years, not 5 or 6).

Look up inflation, and the rules that apply. Based on the sudden jump in price of that house, it would be nearly impossible for anyones salary to accumulate that fast to match what the house went for. It was not real!! Hence the bubble and its inevitable bursting!

[springfieldva]

Originally Posted by cool rob

You sure about that? The house which I take a personal financial loss on will be somebodies gain, as the price I over paid for it, versus what it is worth in this market, has dropped tremendously. Same nice house, same square feet, same nice area, much lower price, more upgrades, which all equals a great deal for someone wanting to buy.

Make sure you know exactly what you are talking about before you post .

I'm still confused -

"Personal financial loss" implies that *you* will be taking a hit in your own wallet. Which would be appropriate in this situation - because you chose to gamble on this property. It implies to me that you paid cash and will be out cash on this deal. Or you plan on forking over the loan difference in cash at closing. Either way, you will take an out of pocket loss.

"Short sale" in this specific situation implies that you want the *bank* to take the hit, thus transferring the risk of *your* gamble onto the taxpayer. (The fact that somebody else may later stumble onto this deal isn't really going to help the taxpayer who is footing the bill).

[becwells]

Originally Posted by cool rob

No, I said:

"So your telling me, that if a house was for sale in 1998 for 150 k, in 1999 for 155k, then it doubles in less than 3 years to 300 k, that you don't smell BS? True 117 might seem low, but I guarantee you that it is closer to the actual value of than house, more so than 300. Nothing legally acumulates wealth that fast, and if it does the bottom at some point will have to fall out."

In other words, he over paid for the house. The house is truely worth between 160-180 K, It was not then and will probably never be worth what he over paid for it (not for a long time at least) . Look up inflation, and the rules that apply. Based on the jump in price of that house, it would be nearly impossible for anyones salary to accumulate that fast to match what the house went for. It was not real!! Hence the bubble and its inevitable bursting!

And I never said the house was that old. Sheesh. If he bought in Manassas 2006, when the bubble was nearing it's top, I'd be willing to bet money that he bought a newer (if not brand new) home. Maybe he did over pay for it, but that was never my point. My point was that he paid the going rate (actually, it was less than the going rate for a lot of new homes at that time) for a house, he put down a third of it's price, and now he's lost all that equity. You went and turned it into how foolish he was for buying a home which you believe was not worth what he paid.

And there's no way in hell a home that sells in 1998 for $150k is only worth $160-180K today. Real estate values appreciate much more quickly than that.

[cool rob]

Originally Posted by springfieldva

I'm still confused -

"Personal financial loss" implies that *you* will be taking a hit in your own wallet. Which would be appropriate in this situation - because you chose to gamble on this property. It implies to me that you paid cash and will be out cash on this deal. Or you plan on forking over the loan difference in cash at closing. Either way, you will take an out of pocket loss.

"Short sale" in this specific situation implies that you want the *bank* to take the hit, thus transferring the risk of *your* gamble onto the taxpayer. (The fact that somebody else may later stumble onto this deal isn't really going to help the taxpayer who is footing the bill).

Dude I am losing:

Credit
Money from initial purchase
Money from upgrades
Time and Work
Amongst other things

However you want to phrase it, I am at a serious personal financial loss. Get it? Now if someone buys the same exact house (with all the bells and whistles as upgrades) that I put my money and effort into for 40% less than I did, well I think that lucky particualar taxpayer wouldn't complain too much.

[PegJames]

I don't feel sorry for people who purchased beyond what they could afford, but to call people who responsibly bought a $300k home in this area "jokers" is just plain ignorant.

Way to go! There are so many people who bought homes responsibly with 10%,20% down are now hundreds of thousands upside down in value. How do you recover from that? Good people, who purchased homes to live in and thrive in who are cannot refinance, or take advantage of all these wonderful low intererest rates because of LOW HOME VALUES!

How is that irresponsible?

The only people who are winning right now are people who have had homes for 7 years or longer who have enough equity to refinance and snag these lower rates. Great for them, however most who purchased after 2005 are suffering.