[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.
