The Housing Market

[matt770]

I've bellyached enough about my situation but I'm curious to hear stories of you or people you know being "trapped" in a home -- not just unable to sell because of negative equity, but also having quality of life negatively impacted.

 

I'm not talking about bad loans and foreclosures -- that's been beaten to death. I'm talking about people who are paying the mortgage with no problem but who have had to put plans and aspirations on hold, waiting for this thing to turn around. Or as is the case where I live, situations where a neighborhood goes into decline because of falling prices -- lower income people start moving in, scaring away the original homeowners, leading to a freefall in prices and ghetto-fication of the neighborhood. It's a unique and very depressing experience, and one I don't hear discussed much.

 

And any positive news on a rainy Tuesday would be appreciated too. Sometimes it feels like we'll never get out of here.

[BeeR]

situations where a neighborhood goes into decline because of falling prices -- lower income people start moving in, scaring away the original homeowners, leading to a freefall in prices and ghetto-fication of the neighborhood. It's a unique and very depressing experience, and one I don't hear discussed much.

 

And any positive news on a rainy Tuesday would be appreciated too. Sometimes it feels like we'll never get out of here.

Been there/done that. First house looked like a great idea at the time - and in fact it was a great house - it just happed to be in what turned out to be a declining neighborhood in Ghettoville, USA aka Hampton Roads VA. Neighbors blasting their "music" at all hours, toys trash etc in the front yards, on and on. Tried to sell it less than a year after buying, took another year to do so. Hang in there.

[dmarc117]

for one, i dont think its ever going back to the good ole days. the prices will stabilize and slowly begin to go up. we may have another bubble in the years to come, but thats a long shot. its a new normal that will allow lower income people to move into places that they never thought they could. i assume detroit is seeing this too. people gettin out of the city and moving to the burbs that were once untouchable.

[matt770]

Been there/done that. First house looked like a great idea at the time - and in fact it was a great house - it just happed to be in what turned out to be a declining neighborhood in Ghettoville, USA aka Hampton Roads VA. Neighbors blasting their "music" at all hours, toys trash etc in the front yards, on and on. Tried to sell it less than a year after buying, took another year to do so. Hang in there.

 

I have family in Poquoson, great little town. But I've seen the areas you speak of. Good for you getting out of there.

[Perchoutofwater]

We wanted to build a house, but due the market we decided just to add on to our house. Houses in this area, when the sell are selling at 3-6% under what they were valued at a year ago, but frankly nothing the size of my house is selling. Once you get over 2,000 square feet around here, nothing is moving. So I just decided to add on. We are in the middle of it right now. I'm adding about 450 square feet to my house, primarily by taking in a balcony we never used and part of our attic. We are also sinking a lot of money into HVAC and window upgrades to make the house more efficient. We basically made the decision that we would stay put for the next ten years.

[bpwallace49]

for one, i dont think its ever going back to the good ole days. the prices will stabilize and slowly begin to go up. we may have another bubble in the years to come, but thats a long shot. its a new normal that will allow lower income people to move into places that they never thought they could. i assume detroit is seeing this too. people gettin out of the city and moving to the burbs that were once untouchable.

 

I read an article last week that estimated the amount of vacant/ forclosed property both commercial and residential in Detroit is around 60%.

 

Scary, scary stuff. blocks upon blocks of vacant property being completely ignored.

[wiegie]

Scary, scary stuff. blocks upon blocks of vacant property being completely ignored.

The best option is to just plow whole neighborhoods under and return them to parkland.

[dmarc117]

The best option is to just plow whole neighborhoods under and return them to parkland.

 

 

arent they doing that in flint?

[matt770]

I read an article last week that estimated the amount of vacant/ forclosed property both commercial and residential in Detroit is around 60%.

 

Scary, scary stuff. blocks upon blocks of vacant property being completely ignored.

 

I was scanning Detroit with the bird's-eye view on Bing maps and was mesmerized. From high above you see the tight residential grid, looks normal -- zoom in, and you see many of the lots no longer have houses on them. What you can't see is that many of the houses still standing are boarded up. I'm fascinated by all of this, I want to visit and take lots of pictures of the devastation, see the packs of wild dogs against the post-armageddon suburban backdrop. Where else can you witness something like that? Chernobyl? Reminds me of that show Life After People.

[dmarc117]

I was scanning Detroit with the bird's-eye view on Bing maps and was mesmerized. From high above you see the tight residential grid, looks normal -- zoom in, and you see many of the lots no longer have houses on them. What you can't see is that many of the houses still standing are boarded up. I'm fascinated by all of this, I want to visit and take lots of pictures of the devastation, see the packs of wild dogs against the post-armageddon suburban backdrop. Where else can you witness something like that? Chernobyl? Reminds me of that show Life After People.

 

 

wat did the makers or robocop know?

[AtomicCEO]

The best option is to just plow whole neighborhoods under and return them to parkland.

 

That's funny... there was a story on NPR about an organization in detroit that was reclaiming vacant lots and creating community gardens on them.

Of course... they had to bring in fresh soil and put it on top of the lot because you really don't want to be growing crops in Detroit soil.

 

But it was very odd to hear about Detroit turning into farmland again.

[SeductiveNun]

Before I met her, my wife bought her first house about 4 years ago, at the peak of the housing market. Once we got engaged we decided it was best to sell her house and live in mine (actually it was a no-brainer). Her house is in a nice neighborhood in North Hudson, WI but is actually part of a twin home, and while it only has a one stall garage it has a fairly large yard. Anyways, she put her house on the market over a year ago and I think she had a grand total of 4 showings in that time. Fortunately we found a good property management company and are now renting her house to ease up on our having to pay 2 mortgages, plus with someone living there the house is much easier to maintain. The renters signed a 1 year lease, and hopefully they either renew or opt for the rent to own, because if that sits empty again with it's really going to hurt having to deal with 2 mortgages again and now with a baby nun on the way.

 

The problem with trying to sell was there were just so many other houses out there that people were either willing to take a loss on or were so desperate to sell that they did so at any price. On top of that the foreclosure market also made it difficult for her to sell at the price she asked, and she was unwilling to take a loss on the house. Break even, yes. Take a loss, no. In fact, the prevalent comment from viewers was that the house was in great shape and in a nice area, but priced too high.

[The Irish Doggy]

If you have the means, eat the loss and get out. I was in a similar situation with bad neighbors, but at least the neighborhood was already lower end. I took a loss on the house after all the maintenance/upgrades to make it attractive to sell during the down economy, but getting away from those people was worth it. I'm not saying you raid the retirement plan or anything, but it sounds like a a place that will only get worse.

[TimC]

I built my first house in 1994. It was a nice 3 bedroom-2 bath place on a tiny lot in a decent subdivision with an HOA with a pool, tennis courts, playgrounds, etc, etc. It was the perfect setting until around 2003 or so when anyone could get a loan. Slowly the white trash started coming. You'd have the kid with the Honda fart pipe at all hours screaming down the road. You'd have the brat with parents that never worked and just hung out all day long looking like they were going to rob you any second. You'd be behind these people in the grocery store and they'd be paying in food stamps because they all got paid under the table on the rare times when they did work or had Grandma living there and burning through her disability. Hell, they made more money than I did because they didn't pay taxes. Kids had no discipline and roamed the streets at all hours. HOA was a joke. I didn't have a garage and I knew they were eyeing the Vette and my big screen TV. We had several run-ins and it was going to be me or him. I wondered every morning if my car would be keyed or just stolen. I got no problems with beating the crap out of some 18-year old punk that will never amount to anything with parents with no f'n clue. Of course, I'd get sued for everything I've worked hard for. I'm telling you....this was a nice neighborhood that everyone wanted to live in also. I almost tripled the price when I sold in '06 from what I paid in '94. We're still close to the neighbors we had that are still living there and it's the ghetto now. How quickly it turned was the shock for me. It turned in 2 years from beautiful suburbia to white trash hell.

 

I moved out in 2006 and built my current house on acres of land to be as far away from my neighbors and people as possible. Still, we have Mexican'ts on the corner. They can't find a job, they can't keep their grass mowed, they can't keep the trash out of their yard. They have a different ricer car sitting in the driveway...sometimes 7 or 8. The kids are losers and they only have them for more welfare. They'll be evicted soon enough because their electricity is currently cut off. Now these are 5 bedroom, 3-story houses here.

 

My main advice is buy a big f'n piece of land and put up the biggest fence you can to get as far away from people as possible. I feel your pain.

[matt770]

Before I met her, my wife bought her first house about 4 years ago, at the peak of the housing market. Once we got engaged we decided it was best to sell her house and live in mine (actually it was a no-brainer). Her house is in a nice neighborhood in North Hudson, WI but is actually part of a twin home, and while it only has a one stall garage it has a fairly large yard. Anyways, she put her house on the market over a year ago and I think she had a grand total of 4 showings in that time. Fortunately we found a good property management company and are now renting her house to ease up on our having to pay 2 mortgages, plus with someone living there the house is much easier to maintain. The renters signed a 1 year lease, and hopefully they either renew or opt for the rent to own, because if that sits empty again with it's really going to hurt having to deal with 2 mortgages again and now with a baby nun on the way.

 

The problem with trying to sell was there were just so many other houses out there that people were either willing to take a loss on or were so desperate to sell that they did so at any price. On top of that the foreclosure market also made it difficult for her to sell at the price she asked, and she was unwilling to take a loss on the house. Break even, yes. Take a loss, no. In fact, the prevalent comment from viewers was that the house was in great shape and in a nice area, but priced too high.

 

House next door is identical to ours in square footage and condition. Former owner was a very nice EMT and her fireman boyfriend. They were quiet and took good care of the place. Unfortunately they were somewhat affected by my crazy cat lady nightmare and some other similar issues and decided they had enough. They sold in July, to the above mentioned ghetto family with the dog in the Guantanimo Bay kennel, for $19,000 less than what we paid in '06. So that gives us a good indication of where we are equity-wise. Add in closing costs and realtor fees, and selling is simply impossible.

 

We kicked around the idea of renting it out, but it would not cover the mortgage. Also the caliber of people who rent here are not what we would trust to maintain the place like we do. In addition to the equity loss, I've sunk about 10 grand on landscaping and kitchen/bath upgrades, plus hundreds of hours of my own labor. I can't bring myself to cut my losses after all the work and what we've endured to still be standing. I still have hope that we will be able to move comfortably in about 3-5 years, and be that much stronger for having stuck it out.

[dmarc117]

My main advice is buy a big f'n piece of land and put up the biggest fence you can to get as far away from people as possible. I feel your pain.

 

 

+11111111111111111111111111111

[dmarc117]

House next door is identical to ours in square footage and condition. Former owner was a very nice EMT and her fireman boyfriend. They were quiet and took good care of the place. Unfortunately they were somewhat affected by my crazy cat lady nightmare and some other similar issues and decided they had enough. They sold in July, to the above mentioned ghetto family with the dog in the Guantanimo Bay kennel, for $19,000 less than what we paid in '06. So that gives us a good indication of where we are equity-wise. Add in closing costs and realtor fees, and selling is simply impossible.

 

We kicked around the idea of renting it out, but it would not cover the mortgage. Also the caliber of people who rent here are not what we would trust to maintain the place like we do. In addition to the equity loss, I've sunk about 10 grand on landscaping and kitchen/bath upgrades, plus hundreds of hours of my own labor. I can't bring myself to cut my losses after all the work and what we've endured to still be standing. I still have hope that we will be able to move comfortably in about 3-5 years, and be that much stronger for having stuck it out.

 

 

just know you may have to make a tough decision. i would stay put if you can deal with crappy neighbors. if the situation and neighborhood becomes unsafe, then get the hell out.

[TimC]

+11111111111111111111111111111

 

Around here in the "rich" neighborhoods where I will never afford to live, the trend is to build a 5,000 square foot house on a 1/4 acre lot. Ummmm, I'd rather have a 600 square foot house on a 40 acre lot. Trust me, it's much easier to add house than find land right next door.

 

ETA: Matt, if it's one neighbor, it may get better. If it's the neighborhood (like mine was becoming)...it's gonna get far, far worse. Every nice, clean person in my old neighborhood was being replaced by filth. My yard was starting to look like Clint Eastwood's house in Gran Torino. It was sort of like why my parents moved us to the suburbs in 1971 when the blacks started taking over. That old neighborhood is now big-time ghetto where the cops won't even come.

Edited October 27, 2009 by TimC

[i_am_the_swammi]

being "trapped" in a home -- not just unable to sell because of negative equity, but also having quality of life negatively impacted.

 

share your feelings about "quality of life", though not the same aspect as you. Our neighborhood has remained fairly upscale, the profile of the neighbors themselves has not changed, houses are being maintained, etc, so i guess from that standpoint, we are lucky.

 

Our situation stems from the fact that, in hindsight, our family grew too fast. Our current 4BR home is 3,100 sf, though much of that sf is in the wrong places....the bedrooms are smaller than we'd like, though the living areas are more than comfortable. When we bought it as newlyweds, all we needed was a large Master BR, and decent 2nd & 3rd BRs so our children would have enough space for themselves. We had always planned on having 4 kids, with the idea that once we had our 4th, our current house would have appreciated in value that we could sell it, take the proceeds, and buy a larger home with 5 BRs.

 

But with our existing mortgage and home equity loan (which we used to pay off our cc debt, finish our basement, upgrade bathrooms & kitchen, and add a nice deck), and the decline in housing prices, we are sitting with a home that is worth just 5-10% more than what we owe. Just 3-4 years ago, it was worth 25-30% more than the debt. if we sold it today, we likely wouldn't have enough to put an adequate down payment on our new place...a real shame, since there are plent of homes on the market at great prices that would greatly increase our quality of life.

 

So our dream home is on hold for now....it could be worse for sure, but we definitely thought we'd be on to bigger and better things by now.

[dmarc117]

Around here in the "rich" neighborhoods where I will never afford to live, the trend is to build a 5,000 square foot house on a 1/4 acre lot. Ummmm, I'd rather have a 600 square foot house on a 40 acre lot. Trust me, it's much easier to add house than find land right next door.

 

ETA: Matt, if it's one neighbor, it may get better. If it's the neighborhood (like mine was becoming)...it's gonna get far, far worse. Every nice, clean person in my old neighborhood was being replaced by filth. My yard was starting to look like Clint Eastwood's house in Gran Torino. It was sort of like why my parents moved us to the suburbs in 1971 when the blacks started taking over. That old neighborhood is now big-time ghetto where the cops won't even come.

 

 

matt, like timc says, the neighborhood getting worse will mean it will get tougher and tougher to get out. in my biz, when the trend gets started, you want to be the 1st one making the trade.

 

eta: the reasons u want to be 1st......with every good neighbor leaving, the neighborhood becomes less appealing. the last sales and comps will be used and may go lower hurting your price.

 

good luck!!!! stay strong!!!

Edited October 27, 2009 by dmarc117

[matt770]

You'd have the kid with the Honda fart pipe at all hours screaming down the road. You'd have the brat with parents that never worked and just hung out all day long looking like they were going to rob you any second. You'd be behind these people in the grocery store and they'd be paying in food stamps because they all got paid under the table on the rare times when they did work or had Grandma living there and burning through her disability. Hell, they made more money than I did because they didn't pay taxes. Kids had no discipline and roamed the streets at all hours. HOA was a joke. I didn't have a garage and I knew they were eyeing the Vette and my big screen TV. We had several run-ins and it was going to be me or him. I wondered every morning if my car would be keyed or just stolen. I got no problems with beating the crap out of some 18-year old punk that will never amount to anything with parents with no f'n clue. Of course, I'd get sued for everything I've worked hard for. I'm telling you....this was a nice neighborhood that everyone wanted to live in also. I almost tripled the price when I sold in '06 from what I paid in '94. We're still close to the neighbors we had that are still living there and it's the ghetto now. How quickly it turned was the shock for me. It turned in 2 years from beautiful suburbia to white trash hell.

 

Tim I've got to say, you've made me laugh my ass off on more than one occasion, and this would be another of those. Great illustration of what I'm seeing here, almost uncanny resemblance really.

[matt770]

My yard was starting to look like Clint Eastwood's house in Gran Torino.

 

Amazing that you mention that movie, it has helped me deal with this situation. Clint is like the dad I never had. When I see the little sh|tbags throwing rocks at my air conditioner or the dog barks incessantly, I do the Gran Torino quotes in my best Clint voice and I feel better. "Get off my lawn" and "We used to stack f*cks like you five feet high in Korea" are my favorites. God I could watch that movie 10 times in a row and cry every time he gets shot at the end.

 

I need to find MP3 clips of that movie for my iPod.

[TimC]

I could watch Gran Torino all day long. He's my hero.

 

The number two reason I hate foreign cars is the tone and decibel level of a fart pipe on a POS Honda 4-cylinder with some idiot white kid with pants hanging down to his knees and dumbass parents that think kids should be able to do whatever they want hits just under my 3rd vertabrae down. It causes my trigger finger to clench and unclench uncontrollably. These will be the first that should be killed if we ever need to go cannibal.

[Ursa Majoris]

The best option is to just plow whole neighborhoods under and return them to parkland.

Make sure the occupants get plowed under too.

 

Matt - buy a gun and make sure the local $hitbags know you have it.

[matt770]

Really appreciate all the replies. Helps more than you know, just to feel less alone in the situation. I'm surprised at how many have gone thru the same and it gives me hope.

 

We will get out of here some day, and that is going to be a special day indeed. In the meantime we have family and friends who support us, and we keep our weekends full of great experiences far away from here.