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Old 12-16-2010, 06:36 PM   #141
Recycles dryer sheets
Join Date: Feb 2006
Posts: 62
Originally Posted by FUEGO View Post
I recently found one of these types. Two blue collar workers, no education beyond high school. They bought a $400k house (in a non-bubble area) at the peak of the bubble, of course financing 100% (verified from public recording of deed of trust and tax records) with what was probably a no-doc liar loan (not verified, just speculating based on what I know).

Fast forward a few years and his home has declined $80-100k based on comparable sales. And it is a new neighborhood with deep inventories of unsold spec homes, and recent buyers looking to get out, and foreclosures. I estimate the mortgage+taxes+insurance+HOA consume around 60-70% of their after tax income. And that is with an inflated pre-bubble income that will probably be slashed in half eventually.

But the interesting part is his perspective on housing as an investment. He is holding on to it, hoping housing will stage a comeback (it is worth $400k after all ). His sole investment, he was hoping it would go up a lot, and in 10 years, sell it and use the proceeds to either fund the downpayment for a much bigger place, or buy a smaller place with cash. Needless to say, it isn't turning out quite how he expected, but he's hanging tight. I can't imagine what kind of deferred maintenance is(n't) happening.
That's so class biased. What color is your collar? There are plenty of people with various educations that have lost money and/or made money on real estate acording to when and/or where they bought.

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Old 12-17-2010, 06:40 AM   #142
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Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 14,105
Our house is ~35% of nw, but we bought in 2001. Valuations went way up, then way down, we would probably break even if we had to sell now. I knew there was a bubble when two years after we moved to WV the old house doubled in price. That was clearly not sustainable.

I was thinking "I should have held out for another two years, then sold and rented where we are now". But that's attempting market timing. I should have bought Microsoft in 1985 too.

But at least we're not underwater like so many others.

I heard the call to do nothing. So I answered it.
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Old 12-17-2010, 07:18 AM   #143
Recycles dryer sheets
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Join Date: Sep 2010
Location: Lebanon, TN
Posts: 112
Mine is about 15% of NW and paid off, I would consider it an investment in that I could always do a reverse mortgage if all else failed.

"If it didn't have bones in it, it wouldn't be crunchy now, would it?" -M. Python

Age 50, DW is 54, 1.4M split 25 Stock, 40 Mutual Funds, 25 Bonds, 5 Commodities, 5 REIT. Own Home, no debts.
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