If your house lost 35% Value Where would you be?

originally posted by: darkbake
I have never owned a home yet. Can you explain this to me? How would losing value in your home put you underwater? You still own a home and would not need to pay rent. Would it not also mean your mortgage payments and property taxes would go down?

Maybe you could be stuck paying mortgage on the higher amount? But that means things stayed the same, not gotten worse?

convergence of an increase in interest rates driving down prices and that results in the home owner not being able to pay for the mortgage, or sell, or rent.. so thats being underwater as a homeowner.. i was there after black Wednesday. its impossible to exist, there was a time i actually hid behind the sofa to avoid answering the door.

more than anything i fear that convergence again..

a reply to: JAGStorm

What are you talking about, homes have doubled in value die to inflation, not equity... losing 40% still puts every one ahead of where they were, by 60%.

Can you rephrase your inquiry?

a reply to: JAGStorm

Many got in with low interest rates, mortgage payments lower than rental rates, I doubt those folks are going to be freaking out, nor selling soon. (They like their -+2% vs 7+ If the sold.)

Edit, it will affect house flippers or those who need to sell in order to move or upgrade. Maybe short selling will be a trend agin. But I doubt it’s going to be like 2008. And I don’t see it coming anytime soon either, I’m not seeing the trends, in fact Utah is bowing up in places I never thought would! New developments everywhere.

South Mississippi, here.

Since time began, we had been immune to overly inflated home prices, simply because our metro area is a backwater, although it has 2 universities, and 2 junior colleges.

That changed a couple of years ago.

Ordinary, run of the mill homes, 3br, 1 1/2 bath, that could be had for 125k, are now at 225k.

In 2017, I bought a 4br, 2 1/2 bath, gated community, lakefront home for $230k. Zillow says it's worth $330k, but a banker friend said it would have brought $500k, before interest rates started climbing.

Last year, people around here were actually bidding MORE on desirable homes, than asking price!! I just couldn't understand it.

Today, different story. Most home for sale listings show "NEW LOWER PRICE".

Personally, I don't care what my home's market value is, because it's paid for, and I will never sell it. I do care about it's tax value, though, which has went up each year, for the last 3 years.

I own a couple of rental houses. The last one I bought, in 2018, cost me $72k. Zillow says it's worth $125k, which is probably correct, even in today's market; Nice starter home in a great school district.

The bad thing about this overpriced market, is what it has done to rental properties.

Many landlords have almost doubled their rent.

Rental properities similar to mine, were renting for $750 a month, 3 years ago. Now, they go for $1200 a month. I don't see how people can afford that.

I haven't increased rent, myself, because I like my renters. They are good people. But, taxes are ridiculously high, and insurance just increased by 20%.

The way I see it, home prices are going to fall, but, the housing market will not improve. The cost of living is rising so rapidly, far exceeding the government's inflation numbers, that most people are UPSIDE DOWN in EVERYTHING!

The days have long passed, when an ordinary worker, with an ordinary salary, could afford to purchase an ordinary home, in any market in the USA. I don't think we will see those days again, ever!

What we will see is camper trailer parks, many illegal, popping up in rural and suburban areas.

If I were younger, I would be building some, right now. They would be money makers!!

a reply to: JFredMuggs

Now is not the time to build, land, materials are also inflated.

The best thing for a young person to do is to live with relatives or rent and wait for the market to crash and then swoop in.

originally posted by: JFredMuggs
"NEW LOWER PRICE".

These days, I don't even trust when someone says "New lower price."

As an example, I was shopping in a Kroger's grocery store a couple years back and they had a sign on the bags of M&M's that said "New lower price." They were $10.99. I didn't buy them. At the checkout counter, I asked them about that. I said, "How is $10.99 a lower price? Last month, they were $8.99."