[quote=UCGal][quote=bearishgurl]
Why should an owner like this NOT be compensated for what they actually have IN their property (+ enough for closing costs) if they are NOT bubble-purchasers?? [/quote]
If they bought 10-45 years ago – they likely will be able to get out their sales price.
But to say they should be GUARANTEED that is to say that housing should “always go up in price”.
I’ve lived in other areas. I’ve seen flat to down markets. A friend bought in a western ‘burb of Philly in the early 90’s. When he sold 10 years later, even though he’d not taken any cash out and had put 20% down – he had to bring cash to the closing. That’s the reality. When I sold my house in a different burb, the increase in price barely covered the closing costs and returned my 20% down. That’s the reality. And I was lucky to get them covered because I’d only owned 8 years…. the market had increased slightly – but not dramatically in the CA bubble style.
The market price is completely unrelated to what the owner has in. Regardless of whether that owner pulled cash out or not… regardless of the size of the down payment they put down. The market price is what a buyer is willing to pay.
Is it fair that my father saw his house increase in price by 20x in 30 years. (29k to 600k). Is it fair that’s it gone down in value since we purchased it 8 years ago? It’s not about fairness. It’s about market value.
Lets say you have 2 houses, identical.. Both people paid the same amount at the same time. One refi’d, pulling cash out. Both did basic maintenance improvements – but nothing dramatic. Their houses should be worth the same if put on the market- without ANY concern over what the owners owe.[/quote]
I understand the current market dictates the price a buyer is willing to pay, UCGal. But prices are depressed everywhere because lenders are still coddling FB’s and various and sundry “home-debtors” and there is no excuse for this in CA.
Let’s narrow the 10-45 yr ownership time frame into 10-15 yrs. Let’s make it about ME (since sdr thinks I’m the ONLY boomer who wants to sell/retire in the next few years, lol). I did NOT pay too much 11+ years ago (I actually rec’d a lg credit in escrow also). Even if I wanted to sell NOW, I need to make a few repairs and improvements before doing so. Whether or not I spend this money, I KNOW I may NOT be able to recover my entire downpayment and my improvement $$ upon sale with closing costs added in. That’s not right! This is happening due to it not being a normal market right now because the local REOs which sold more recently (and should have sold in 2007-08) dragged down the values in my local market. Even though most of those REO sold comps have now become too old to use, we’ve got a buyer pool down here than can now choose from five zip codes (from formerly three). The two “newer zip code” markets are still extremely depressed. In areas of 91915 (7-12 mi away), there are still 6-12 properties on every street which are in various stages of squat-mod, squat-SS or languishing vacant REO (some currently being marketed). Yes, they ALL have HOA/MR, the MR is very high and most have <4000 sf lots. When I bought my current property, these subdivisions did not exist! Young buyers (who mostly grew up in South County) are attracted to them because of the "style" of their construction and most do not realize all that they will be getting into if an offer they make on them should be accepted. Even though their depressed prices are not comps to my property, these heavily-encumbered newish tracts in lizardland siphon young, qualified buyers in the prime stage of homebuying away from my well-established area with large lots.
ALL this distress in 91915 (example here) was caused by FB's. This whole string of developments were built during the "FB era." It started purging in early 2007 and it should be finished with by now. But it’s NOT anywhere near close to being plowed thru solely due to lender malaise!
I will likely leave SD County and I really feel I’m going to have to rent my property out (which will still be okay for a few years) but would prefer to sell and recoup what I have in it. My “target buyer” will likely be a local (or fmr local) who has longtime family on the same street or within a block or two of me. That’s how it works around here.
There are a LOT of owners in my position in SD County. Many thousands. Prospective buyers on this forum have repeatedly complained about lack of well-located “equity sale” inventory on the market in SD County in recent years and this is the reason why. “WE” can’t take a bath and still have a modest retirement so those who are already past retirement age and would have preferred to relocate have remained to await a better day (hopefully before getting to the old and feeble stage). We are able to do this because, unlike the vast majority of current sellers, we CAN!
