when will my home's value go up again?

[dooo42]

my home is underwater and our monthly mortgage payment is getting harder and harder to pay. my wife are i trying to decide what we should do if we can' t afford our house anymore. i heard it may take ten years for homes values to recover. in your honest opinion, when do you think the home values will go back up?

thanks

 

[MichaelB]

my home is underwater and my wife are i trying to decide what we should do with it if the price doesn't rebound in the next few years. i heard it may take ten years for the homes to recover. in your honest opinion, when do you think the home values will go back up?

thanks

Why do you need to do something? Do you and your wife need to relocate?

 

[Gatordoc50]

my home is underwater and my wife are i trying to decide what we should do with it if the price doesn't rebound in the next few years. i heard it may take ten years for the homes to recover. in your honest opinion, when do you think the home values will go back up?

thanks

Because we have decided to pass our 150 trillion in unfunded liabilities onto the next generation, they won't have any money left over to inflate asset prices like homes or stocks. Some areas are so oversold that it's cheaper to buy than rent and some areas appeal to the wealthy so those will see some price appreciation.

 

[rescueme]

my home is underwater and our monthly mortgage payment is getting harder and harder to pay. my wife are i trying to decide what we should do if we can' t afford our house anymore. i heard it may take ten years for homes values to recover. in your honest opinion, when do you think the home values will go back up?

thanks

What does the current perceived value of a home (or any other financed purchase - such as a car) have anything to do with your ability to make a payment?

If a home loses half, or gains half its perceived "worth", what does that really mean?

Unless you have a need to move (e.g. j*b transfer, j*b loss, health problems, or other "real" reason), you still need a place to live.

Assuming you have the same income as you had when you signed the note/mortgage papers, what does it matter?

If you can make the payments in order to satisify the commitment you made, continue to do so. To do otherwise just means (to me) is that you are a person who cannot keep their word, nor satisify a commitment.

Don't blame it on a bank, the economy, or the opinion of others to say what the current value of your home is.

You may not like my comment, but you asked for opinions...

 

[pimpmyretirement]

My wife and I paid $309k, our townhome is estimated at $236k on zillow. Units in our townhomes have sold for as little as $190k recently. We still owe $217k.

I am assuming it will be 10 years before prices recover to what we paid. However, I don't think what the market will do moving forward has a major impact on where I live. My mistake is already made. I invested in an expensive asset using leverage. I lost. Whoops. That recovery I am "waiting" for is really just the progress of inflation over the next decade. $309k in 10 years is worth about what my home would sell for today.

So...

If I want to downsize, I sell the old house for what the market will bear and buy a new one at the going market rate. If I really think housing is that undervalued (to the point where I wouldn't want to move for fear of "losing" value), I borrow some money to equalize the value between the old and new house, then buy some form of paper real estate. That puts me in more or less the same situation I am in today.

If I just want to move laterally, I sell the old home and buy a new one. The new house has lost value too, so other than the transaction costs of moving, I am no further ahead or behind.

If I want to upsize, I sell the old house and buy the new bigger one. Since it is worth more, the value I "lost" by selling will be recovered as the home appreciates. I better be confident the more expensive property will appreciate to, since I would be borrowing even more money to gamble on housing prices.

This all assumes one has enough assets after the selling the old home to come up with 20% down for the new one. If not, that's rough. I am not sure what I would do in that situation. Probably cut all expenses to the point of real suffering and save as much as possible until I could afford to downsize. I am not smart enough to predict what the market will do, and I personally am terrified investing on borrowed money, if it creates financial hardship.

 

[braumeister]

Rise and fall of home values depends almost completely on where you live. In some parts of the country the values have been rising nicely in the last year or so. Other areas are seeing a continuing decline. Making a general statement is pointless.

 

[Gatordoc50]

Rise and fall of home values depends almost completely on where you live. In some parts of the country the values have been rising nicely in the last year or so. Other areas are seeing a continuing decline. Making a general statement is pointless.

Rising from the bottom of the abyss, yes. I bought a home last year and am closing on the sale in three weeks for a profit of 62,000 or thirty percent. Yay!! On the other hand, I'm down about 300k on a property I bought at the top. Booooo!!

 

[Lakewood90712]

Rise and fall of home values depends almost completely on where you live. In some parts of the country the values have been rising nicely in the last year or so. Other areas are seeing a continuing decline. Making a general statement is pointless.

I can only spaeak for So Cal and Las Vegas ,and I'm not an expert . I've been thru 2 prev. real easte boom/bust cycles . Was " Underwater" on home value back in 1992-1995. Most anyone who bought from 2004-2008 is "underwater".

So Cal is a mixed bag. The upper end near the ocean and hillsides in exclusive areas are down 20-40 % and may recover in the next ten years. These are not dependent on avearge household incomes.

Middle class houses and condos in so cal are down 40-50% from the peak. Some have recovered a little , some are still dropping. Most will not see recovery to peak ( crazy) prices anytime. Manufacturering has continued to leave both the state and the country. Most of the boom economy was fueled by real estate speculation itself. Both are gone forever.

Las Vegas is down 40-75% with 4-5 year old houses and condos selling below cost of construction. I don't think those prices will come back during the life of the house. The area incomes will just not support anything higher.

P.S. If you are fishing for folks on this forum to say " Go ahead , default , cuz everyone else is " I don't think so. If your finances are truly headed for a train wreck , then consult with a BK atty. BK or a short sale is appropriate in some situations.

 

[ERD50]

What does the current perceived value of a home (or any other financed purchase - such as a car) have anything to do with your ability to make a payment?

...

Assuming you have the same income as you had when you signed the note/mortgage papers, what does it matter?

+1 I don't understand the OP either.

-ERD50

 

[haha]

my home is underwater and our monthly mortgage payment is getting harder and harder to pay. my wife are i trying to decide what we should do if we can' t afford our house anymore. i heard it may take ten years for homes values to recover. in your honest opinion, when do you think the home values will go back up?

thanks

There are realists on this board, and moralists. If you want to do the best for your family, you will either listen to the realists, or stop reading this thread. That is unless you want a lecture on morality from some faceless Cotton Mather wannabe on the internet.

 

[Ronstar]

Home values will probably go up eventually. You don't lose money on a house until you sell for a loss, so just hold on and weather the storm.

I don't see how being "underwater" is a big problem. As far as I know, house payments stay the same regardless of the fluctuating house value. Everything should be ok as long homeowners make enough money to pay the mortgage. Like Rescueme stated, the value has nothing to do with one's ability to make a payment. The problem is that homeowners have come to expect their homes to always increase in value.

Look at cars - I would think that almost everyone that takes out a car loan is "underwater" at some point during the course of the loan. But there's no outcry because people expect the value of their cars to go down.

But cars and houses are the same - they are both assets purchased through debt, and the buyers need to meet their debt obligations.

 

[rescueme]

But cars and houses are the same - they are both assets purchased through debt, and the buyers need to meet their debt obligations.

Yeah, it's that simple, IMHO.

Why do people think the place they reside in is an "investment".

Heck, you can go to the stock/bond market - or a casino to increase your possible "return".

If you don't wish to take on the risk? Then just rent.

Home ownership (like the equity/bond market) is not for everybody...

 

[rescueme]

That is unless you want a lecture on morality from some faceless Cotton Mather wannabe on the internet.

Really?

I left my prejudices (of other races, of whom I lived/fought as "brothers", in Nam.)

Sorry, I thought you were better than that.

Yeah, I know I'm going to be "centured" by the moderators, but your comment is offensive to me - so be it...

BTW, you have been "promoted" to my ignore list...

 

[W2R]

The bad news is that (in my often mistaken opinion, anyway) the housing market is going to take a long, long time to recover nationwide.

The good news is that your home is worth what an equivalent home would be worth, and in that sense its worth probably hasn't changed at all.

The dollar value of your home doesn't have to hold you back, unless you need to move for work or unless you planned to downsize for retirement.

 

[ERD50]

There are realists on this board, and moralists. If you want to do the best for your family, you will either listen to the realists, or stop reading this thread. That is unless you want a lecture on morality from some faceless Cotton Mather wannabe on the internet.

You do seem to be jumping the gun here. The OP hasn't yet expressed just why he may not be able to afford it. There are lots of options, depending upon the circumstances.

I almost got the impression it is an emotional thing. Like it is 'hard' (emotionally) to pay, knowing the value has gone down? Or has their income changed? Maybe the answer is on the income side? Or re-fi, or any number of things.

-ERD50

 

[MichaelB]

my home is underwater and our monthly mortgage payment is getting harder and harder to pay. my wife are i trying to decide what we should do if we can' t afford our house anymore. i heard it may take ten years for homes values to recover. in your honest opinion, when do you think the home values will go back up?

thanks

This is a different situation. Are you unable to pay your mortgage because your financial situation is difficult or is it getting more difficult because the house is worth less than the mortgage?

 

[Alan]

my home is underwater and our monthly mortgage payment is getting harder and harder to pay. my wife are i trying to decide what we should do if we can' t afford our house anymore. i heard it may take ten years for homes values to recover. in your honest opinion, when do you think the home values will go back up?

thanks

First question that comes to mind is why is your mortgage getting harder? If your house had increased in value the mortgage would have been the same unless you have a variable rate.

Houses falling in value are not a recent phenomenon, just a lot more wide-spread than it used to be. Both my sister (1992) and my brother (2001) lost their jobs and had to sell their houses at a loss. In England you can't walk away from a mortgage so my sister had to pay off her mortgage at a rate set by the bankruptcy judge. With my brother we were in a position to loan him a few thousand which he paid back within a couple of years as he got a new job after 5 or 6 months.

So, stick to your guns and try to LBYM and pay it down as best you can.

 

[Gatordoc50]

A mortgage payment also includes taxes and insurance, both of which are going up. If it is because of those increased costs that you are having trouble paying your mortgage then I would consider walking. As much as you here from the government about sharing the pain, I don't see the pain being shared.

 

[frayne]

my home is underwater and our monthly mortgage payment is getting harder and harder to pay. my wife are i trying to decide what we should do if we can' t afford our house anymore. i heard it may take ten years for homes values to recover. in your honest opinion, when do you think the home values will go back up?

thanks

IMHO not anytime soon. Houses are a commodity and price is driven by supply and demand. Cheap easy money and loans drove the bubble, those such as yourself have gotten caught in the downward spiral. As for what you should do, follow your gut. In light of all the money Realtors, bankers, and mortgage brokers made, not to mention the corrupted financial instruments packaged and sold by the financial institutions during the boom years without regard to ethics or morality, I wouldn't be too concerned with what people thought if you decide to walk. One other option would be to consider bankruptcy if the situation warrants it, hell Trump has used bankruptcy four times. It is a legal means you can use to help resolve some of your financial problems.

 

[TromboneAl]

What does the current perceived value of a home (or any other financed purchase - such as a car) have anything to do with your ability to make a payment?

I think I can explain it. He didn't mean to say this

"my home is underwater and as a result our monthly mortgage payment is getting harder and harder to pay."

Perhaps he meant to say this:

Our mortgage payment is getting harder and harder to pay. We would like to sell our house and buy a cheaper one (or maybe refinance), but because we owe more than the house is worth, those options are unattractive or unavailable. Perhaps those options will be better when prices have improved. When do you wise people think that will happen?

P.S. my Shift key is broken.
​

 

[MichaelB]

I think I can explain it. He didn't mean to say this

"my home is underwater and as a result our monthly mortgage payment is getting harder and harder to pay."

Perhaps he meant to say this:

Our mortgage payment is getting harder and harder to pay. We would like to sell our house and buy a cheaper one (or maybe refinance), but because we owe more than the house is worth, those options are unattractive or unavailable. Perhaps those options will be better when prices have improved. When do you wise people think that will happen?

P.S. my Shift key is broken.
​

Much better. Thanks for the clarification, and also for using the shift key.

 

[REWahoo]

Al, it would be nice if the OP posted again to clarify the questions everyone has regarding his intent, but I doubt it will happen. His track record is one of starting a thread and rarely posting to the thread again. Not sure why...

 

[eridanus]

P.S. If you are fishing for folks on this forum to say " Go ahead , default , cuz everyone else is " I don't think so.

Eh, WTH, I'll say it.

You and the bank entered into a contract. They loan you money and you pay them over 15/20/30 years. If you default on the contract, the bank gets a house.

BOTH the bank and you are at risk. The bank took a risk that you may default. Their collateral is the house. Unless something was fraudulent, such as an inflated appraisal or a broker/applicant falsifying income, then it's a simple business agreement.

==> You do X, you get Y. You fail to do X, we get Y; your credit is penalized and you possibly get a 1099 for forgiveness of debt.

The bank and you shouldn't expect housing values to increase all the time. They should've demanded more down payment. You shouldn't have bought more house than you could afford or taken that ARM or whatever.

In the end, it's a business agreement. Treat it like one.

 

[Amethyst]

To respond to the OP's question, "When will my home's value go up?"

If I knew what housing prices would do, I would be very, very wealthy. Even real estate agents, who know the local markets better than anybody, can get fooled into making bad investments.

Look at your area. Is it growing? Are there lots of jobs, or likely to be lots of jobs in future? Are the surroundings beautiful and desirable? Are the schools first rate? In short, do many people want to live there? If any of these is true, and if you take good care of your home, then the value of your property is likely to rise over time. Probably not at "bubble" or "boom" rates, but you'll notice some appreciation.

Good luck with the payments. Life can really suck sometimes.

Amethyst

 

[Nova]

The OP hasn't explained his situation, but I am wondering if he got one of those "creative financing" mortgages with particularly low payments during the first few years. That could have allowed him to get into more house than he could afford. As the loan resets per the documentation (read that as becomes less "creative financing"), the OP may be struggling to make his higher mortgage payments. Under these conditions, the borrower finds himself with a double-whammy. He may not want to "walk" on his commitments, but he may not be able to afford to make the higher payments. Just speculating...