Industry veterans are making the business decision to walk.
You’d have to be nuts to keep on making payments for nothing in return.
Choices, choices…
1) If you walk, you can save a guaranteed amount of $12,000/year plus compound interest.
2) If you hang on, the future future appreciation of condo needs to return all of that you and more (for the added risk). In the mean time, you’ll be negative $1000/month until whenever…..
3) You keep on losing $1000/mo and your balloon payment comes due in Nov 2009. Now what? You can’t refinance because the value is not there so the bank forecloses on you anyway. Who was the sucker?
“A lot of people are starting to look at it like a business decision,” he said. Most distressed homeowners are “your normal, hard-working families. They got caught up in the frenzy of the market and kept expecting it to appreciate.”
One of those people is Dave Pierce, a veteran real estate agent who recently went into default on a five-bedroom, 3,864-square-foot Torrey Highlands home, which he bought for about $1 million 3½ years ago.
Despite his 30 years in the real estate business, Pierce says he misjudged the market, getting in over his head with financing much like thousands of other San Diegans. He can’t refinance his loan because his home is now worth far less than he paid for it.
