Downsizing got derailed, is there a way out?

[W2R]

The problem is I just don't see any houses selling at all here.

I can sure relate to that one. But there is hope! I nearly fell off my chair yesterday when I checked the weekly real estate sales in my neighborhood, and discovered that one of the foreclosures in my neighborhood actually SOLD!!! I have been checking the recorded home sales every week, and as far as I can recall this was the first house in my neighborhood to sell at any price in over a year (other than from one family member to another).

The foreclosure that sold was one of those Fannie Mae Homepath renovation deals, where they give the buyer up to $35K for renovations (or whatever, I suppose). The interest rate was rock bottom, the closing costs were completely paid, and the ad also implied no down payment. Selling price on this home was 80% of the amount outstanding on the previous mortgage, plus the buyer got the above perks.

But whatever it took, I'm glad it sold. The other foreclosures in my neighborhood have been just sitting there and not selling, for over a year even though they are all in reasonable shape and apparently not trashed. I am thinking that this may mean that we are near or at the bottom in my neighborhood. I can hope, anyway. And meanwhile, the real estate situation gives a new meaning to "stable neighborhood" - - neighbors are being extra nice to each other, as though we are all stranded on a desert island together. In a sense, we are.

I think for us, unless we want to move to a different area, we just might as well stay here. After you figure in the cost and trouble to moving and real estate fees. But we have low taxes and insurance cost.

We had planned to move elsewhere, but decided to wait. Like you, we have low taxes. We don't have to worry about the neighborhood changing for the worse, since nobody else can move either and the neighborhood is essentially frozen in time. We are happy here for now, though eventually we'd like to move north.

 

[Gatordoc50]

- We find ourselves stuck in this large house -

We built this 3600sqft 2 story pool house in central Florida in 2002, before the Real Estate Boom for $ 500K, it has been paid off, no mortgage, no equity line of credit.......

Now the baby of the house just left for College, just the time we were waiting for to down size to a smaller, more manageable, single story & a cheaper maintenance house. We hardly ever use half of the house.

I think we are maintaining this white elephant with its pool care, heavy landscaping & cooling costs for not much use. My and DW's frugality which helped us build some assets does not go along with this kind of resource wasting situation.

We are 55 & 50, and are ready to cut the work load even more from the part time we work in our business, and want to travel. Although it is a beautiful house in a good upscale neighborhood, the house prices are down 40% around here and I suspect we may not end up with more than $350K after the transaction costs and such..... . Due to this, we have not put ours up for sale yet.

This house served us well in raising kids, socializing ..etc.., but we are not able to move to the next phase in life because of this dreaded real estate situation which does not seem to have an end in sight.

How do the other forum members deal or have dealt with this frustrating situation, I would welcome any and all ideas, opinions. etc.... Thank you in advance.

Regards

I wouldn't sell a 9 year old home in an upscale neighborhood for 100 bucks a square foot! What are you going to do with the savings? Buy stocks?

 

[inkitnow]

You seem paralayzed by indecision. I find the following adage helpful....

"You can be right or you can be happy." Choose happiness, peace of mind and the lifestyle that supports what you value. It's only money. And as many others have pointed out, you can probably buy the "perfect" house in FL for much less than you sell this one for. As the Nike commercial says: Just Do It.

 

[chris2008]

There was a guy who "sold" his house in a kind of lottery system. He wanted to get x $, so he sold x/10 tickets for 10 $ each. Great success!

 

[rescueme]

There was a guy who "sold" his house in a kind of lottery system. He wanted to get x $, so he sold x/10 tickets for 10 $ each. Great success!

You can't do that (in the U.S.) legally.

 

[thoreau]

What are the reasons for needing to downsize? I see this everywhere, but I don't understand it. Of course if its in an upscale neighborhood, you can't let the grass grow. Before our neighbors were right next to us and we could see other neighbors across the street. Now while we have neighbors on both sides, they are through forest and we cannot see them. In front of us is a large stream and fields all under conservation easement.

We upsized. But in the winter here in New England, we don't heat about half of the house in the winter time. So for heating purposes we down sized. But our property is bigger, and the garage is 3 times bigger.

 

[thoreau]

Since we bought our house back in the 80's, and since it was paid for, we used a formula which works some places and not others. Houses in our area were rising at about $3K a year until the boom. We pretended there was no boom. We multiplied the number of years since we bought the house by the 3K and added that to the original sale price, then we added another 20% of that on top. We offered it at that. This is still 20% higher than it would have been if there was no boom. The buyers thought they were getting a super deal.

We also completely renovated the house from top to bottom, added a second bathroom and laundry room and a 400 sq foot deck, so that it was essentially a new house+.

Property is going to continue to drop until it reaches the point where it would be without the 20% we added in another18 to 36 months. But we had to move on and stop believing that the boom prices are going to return except in another 15 years.

 

[SarahW]

In your shoes, I would look very carefully at the neighborhoods where you are thinking of buying a smaller house. Often, and annoyingly, it seems that to live in a really nice section, you have to live in a bigger house, with all its attendant expenses. Smaller houses are in cheaper sections, drawing less desirable neighbors (not always...I know well...but generally speaking).

Amethyst

I totally agree with this. We have also considered downsizing but it seems that smaller houses are in what would be considered "starter" home developments. I suppose we could buy land and custom build, but it would take a large parcel of land to guarantee that we had some amount of control over what might be built next door. Also, living in a rural setting is not my first choice.

Our home is mortgage-free, so that makes it easier to just sit back and do nothing.