This owner did the smart thing by getting out while they could without losing the entire farm. By the time the bottom hits (my guess is 3-4 years), houses like this will sell for $250k-$275k. Just a couple of months ago, there were posters on this forum saying that north county was not likely to drop many % points since the demand was so high to live there. My argument has always been, “who’s going to buy these houses at high prices when….(1) it’s much harder to get a loan…… (2) the buyer is now going to have to put money down………(3) with the economy getting softer and softer, people will be losing jobs which will put more inventory on the market…….(4) the banks will be forced to dump their REO’s. (5) appraisals will be have to be realistic which will stop many sales if the seller can even find a buyer.”
All these things are starting to happen and no areas will be immune from falling $$$$$$$$$$$ prices. There are no rules as to how low they can fall before they stop falling. It’s all about jobs, affordability, loan rates, appraisals and qualifying.
Like I said: This seller did the right thing and should be happy that he didn’t take a much larger loss.

This owner did the smart thing by getting out while they could without losing the entire farm. By the time the bottom hits (my guess is 3-4 years), houses like this will sell for $250k-$275k. Just a couple of months ago, there were posters on this forum saying that north county was not likely to drop many % points since the demand was so high to live there. My argument has always been, “who’s going to buy these houses at high prices when….(1) it’s much harder to get a loan…… (2) the buyer is now going to have to put money down………(3) with the economy getting softer and softer, people will be losing jobs which will put more inventory on the market…….(4) the banks will be forced to dump their REO’s. (5) appraisals will be have to be realistic which will stop many sales if the seller can even find a buyer.”
All these things are starting to happen and no areas will be immune from falling $$$$$$$$$$$ prices. There are no rules as to how low they can fall before they stop falling. It’s all about jobs, affordability, loan rates, appraisals and qualifying.
Like I said: This seller did the right thing and should be happy that he didn’t take a much larger loss.

This owner did the smart thing by getting out while they could without losing the entire farm. By the time the bottom hits (my guess is 3-4 years), houses like this will sell for $250k-$275k. Just a couple of months ago, there were posters on this forum saying that north county was not likely to drop many % points since the demand was so high to live there. My argument has always been, “who’s going to buy these houses at high prices when….(1) it’s much harder to get a loan…… (2) the buyer is now going to have to put money down………(3) with the economy getting softer and softer, people will be losing jobs which will put more inventory on the market…….(4) the banks will be forced to dump their REO’s. (5) appraisals will be have to be realistic which will stop many sales if the seller can even find a buyer.”
All these things are starting to happen and no areas will be immune from falling $$$$$$$$$$$ prices. There are no rules as to how low they can fall before they stop falling. It’s all about jobs, affordability, loan rates, appraisals and qualifying.
Like I said: This seller did the right thing and should be happy that he didn’t take a much larger loss.

How could you know if it’s the smart thing to do without knowing more about the circumstances?

Assuming most scenarios, besides the owner owning the house outright – I would say that is not the smart thing to do.. if it were his primary residence then he should have ridden it out. Where is he going to live now? Tack on 100+k in losses to pay for, his new monthly expense in a house half as much or a rental with as many bedrooms is going to end up costing just as much.

Yeah I think people should get out if theres a wash or they lose a few thousand, but losing 30% and losing your primary residence is not an example of a smart move in my opinion. It’s going to take the guy 7 years to pay off that 130k most likely, might as well just go with foreclosure and start over with fresh credit. Then again maybe the credit wouldn’t be so fresh after 7 if there are any similarities between foreclosure and the new bankruptcy laws…

How could you know if it’s the smart thing to do without knowing more about the circumstances?

Assuming most scenarios, besides the owner owning the house outright – I would say that is not the smart thing to do.. if it were his primary residence then he should have ridden it out. Where is he going to live now? Tack on 100+k in losses to pay for, his new monthly expense in a house half as much or a rental with as many bedrooms is going to end up costing just as much.

Yeah I think people should get out if theres a wash or they lose a few thousand, but losing 30% and losing your primary residence is not an example of a smart move in my opinion. It’s going to take the guy 7 years to pay off that 130k most likely, might as well just go with foreclosure and start over with fresh credit. Then again maybe the credit wouldn’t be so fresh after 7 if there are any similarities between foreclosure and the new bankruptcy laws…

I know that prices have been falling like a rock that has been dropped from a 50 story building in the inland areas and now they’re beginning to fall in north county and the rest of San Diego, Orange County and the western portions of L.A. If this seller attempted to ride it out, it;s highly likely that they would have waited 15+ years just to get back to the $500k range. Housing prices in SoCal are so out of wack with the majority of the rest of the country that things are going to be bad for a long, long time. If you look at the sales history of that specific home, it sold in 1986 for $129,500 and again in 2000 for $281,500. If the seller knew for a fact that he would never have to move out of San Diego and could afford the payments until the mortgage was paid off, then I guess one could make an argument that you have to live somewhere. Me……I would have unloaded that turkey. post-haste.
The seller made the smart decision. Your mileage may vary.

I know that prices have been falling like a rock that has been dropped from a 50 story building in the inland areas and now they’re beginning to fall in north county and the rest of San Diego, Orange County and the western portions of L.A. If this seller attempted to ride it out, it;s highly likely that they would have waited 15+ years just to get back to the $500k range. Housing prices in SoCal are so out of wack with the majority of the rest of the country that things are going to be bad for a long, long time. If you look at the sales history of that specific home, it sold in 1986 for $129,500 and again in 2000 for $281,500. If the seller knew for a fact that he would never have to move out of San Diego and could afford the payments until the mortgage was paid off, then I guess one could make an argument that you have to live somewhere. Me……I would have unloaded that turkey. post-haste.
The seller made the smart decision. Your mileage may vary.