The new smart financial move is walking away

[davelj]

[quote=briansd1][quote=sdrealtor]I just dont think people are as quick to walk away. From what I have seen I just think Dave’s post was far closer to reality in the way people look at and react in these situations.[/quote]

I think that it depends on the situation.
[/quote]

Yes, I think there are a LOT of factors at work in this decision. Among them:

(1) How far underwater is the mortgage in both dollar and percentage terms?
(2) What does this “hole” represent as a percentage of total net worth?
(3) What is the cost of comparable alternatives (that is, comparable rental options)?
(4) How much financial stress is related to continuing to pay the mortgage?
(5) What are the total non-monetary negative externalities with respect to family, image, credit score, job, etc. etc.?

I believe that the current research suggests that the 12%-15% underwater range is where default rates start to hockey stick upwards. Which kind of makes sense.

If you bought a $500K house at the peak and put 10% down and the value’s fallen by 25%, then you’re about $75K underwater. That’s a lot of money if you (a) don’t save much, (b) don’t have good job stability, (c) don’t have strong community ties (kids in school, etc.) and (d) the rental alternatives are much cheaper. A lot of those folks will walk. And with good reason.

However, it’s a totally different situation if you (a) have a decent net worth and savings, (b) have good job stability and the mortgage isn’t overly taxing, (c) have strong community ties, and (d) moving under duress would be an issue for family and reputation issues. Most of these folks will gut it out. And there’s a lot of them.

So, it just depends.

[SD Realtor]

Desmond try not to change what you said. You wrote that the people who didn’t buy now are probably laughing. Nothing more and nothing less.

Let’s not retrofit your post okay? I know I am correct that those who did not buy are not laughing at all. This doesn’t mean they wish they would have bought. This doesn’t have anything to do with those who did buy and are living in or out of a mess.

Maybe you didn’t buy and you are laughing. I would tend to make a small wager with you that I know and work with alot more people who did not buy a home back at the peak then you do. They are mad as hell. Not because they did not buy, but because they are now getting screwed. They made the right choice, they know it, I know, we all know it. They foolishly believed the market would be allowed to move unconstrained. They didn’t know the rules of free market would no longer pertain to housing. So are they committed to their decision? Yes of course. Do they regret not buying? No they do not. Are they frustrated and pissed off? Yes they are. Are the laughing like you posted? No not really, they are not.

[SD Realtor]

Desmond try not to change what you said. You wrote that the people who didn’t buy now are probably laughing. Nothing more and nothing less.

Let’s not retrofit your post okay? I know I am correct that those who did not buy are not laughing at all. This doesn’t mean they wish they would have bought. This doesn’t have anything to do with those who did buy and are living in or out of a mess.

Maybe you didn’t buy and you are laughing. I would tend to make a small wager with you that I know and work with alot more people who did not buy a home back at the peak then you do. They are mad as hell. Not because they did not buy, but because they are now getting screwed. They made the right choice, they know it, I know, we all know it. They foolishly believed the market would be allowed to move unconstrained. They didn’t know the rules of free market would no longer pertain to housing. So are they committed to their decision? Yes of course. Do they regret not buying? No they do not. Are they frustrated and pissed off? Yes they are. Are the laughing like you posted? No not really, they are not.

[SD Realtor]

Desmond try not to change what you said. You wrote that the people who didn’t buy now are probably laughing. Nothing more and nothing less.

Let’s not retrofit your post okay? I know I am correct that those who did not buy are not laughing at all. This doesn’t mean they wish they would have bought. This doesn’t have anything to do with those who did buy and are living in or out of a mess.

Maybe you didn’t buy and you are laughing. I would tend to make a small wager with you that I know and work with alot more people who did not buy a home back at the peak then you do. They are mad as hell. Not because they did not buy, but because they are now getting screwed. They made the right choice, they know it, I know, we all know it. They foolishly believed the market would be allowed to move unconstrained. They didn’t know the rules of free market would no longer pertain to housing. So are they committed to their decision? Yes of course. Do they regret not buying? No they do not. Are they frustrated and pissed off? Yes they are. Are the laughing like you posted? No not really, they are not.

[SD Realtor]

Desmond try not to change what you said. You wrote that the people who didn’t buy now are probably laughing. Nothing more and nothing less.

Let’s not retrofit your post okay? I know I am correct that those who did not buy are not laughing at all. This doesn’t mean they wish they would have bought. This doesn’t have anything to do with those who did buy and are living in or out of a mess.

Maybe you didn’t buy and you are laughing. I would tend to make a small wager with you that I know and work with alot more people who did not buy a home back at the peak then you do. They are mad as hell. Not because they did not buy, but because they are now getting screwed. They made the right choice, they know it, I know, we all know it. They foolishly believed the market would be allowed to move unconstrained. They didn’t know the rules of free market would no longer pertain to housing. So are they committed to their decision? Yes of course. Do they regret not buying? No they do not. Are they frustrated and pissed off? Yes they are. Are the laughing like you posted? No not really, they are not.

[SD Realtor]

Desmond try not to change what you said. You wrote that the people who didn’t buy now are probably laughing. Nothing more and nothing less.

Let’s not retrofit your post okay? I know I am correct that those who did not buy are not laughing at all. This doesn’t mean they wish they would have bought. This doesn’t have anything to do with those who did buy and are living in or out of a mess.

Maybe you didn’t buy and you are laughing. I would tend to make a small wager with you that I know and work with alot more people who did not buy a home back at the peak then you do. They are mad as hell. Not because they did not buy, but because they are now getting screwed. They made the right choice, they know it, I know, we all know it. They foolishly believed the market would be allowed to move unconstrained. They didn’t know the rules of free market would no longer pertain to housing. So are they committed to their decision? Yes of course. Do they regret not buying? No they do not. Are they frustrated and pissed off? Yes they are. Are the laughing like you posted? No not really, they are not.

[sdrealtor]

Brian
I’ll take that as affirmation that you have never owned a home and are making this all up as you go along. When I was younger, I was much smarter also. At least I thought so.

[sdrealtor]

Brian
I’ll take that as affirmation that you have never owned a home and are making this all up as you go along. When I was younger, I was much smarter also. At least I thought so.

[sdrealtor]

Brian
I’ll take that as affirmation that you have never owned a home and are making this all up as you go along. When I was younger, I was much smarter also. At least I thought so.

[sdrealtor]

Brian
I’ll take that as affirmation that you have never owned a home and are making this all up as you go along. When I was younger, I was much smarter also. At least I thought so.

[sdrealtor]

Brian
I’ll take that as affirmation that you have never owned a home and are making this all up as you go along. When I was younger, I was much smarter also. At least I thought so.

[scaredyclassic]

wait, i got the schrute quote wrong:

I never smile if I can help it. Showing one’s teeth is a submission signal in primates. When someone smiles at me, all I see is a chimpanzee begging for its life.

[scaredyclassic]

wait, i got the schrute quote wrong:

I never smile if I can help it. Showing one’s teeth is a submission signal in primates. When someone smiles at me, all I see is a chimpanzee begging for its life.

[scaredyclassic]

wait, i got the schrute quote wrong:

I never smile if I can help it. Showing one’s teeth is a submission signal in primates. When someone smiles at me, all I see is a chimpanzee begging for its life.

[scaredyclassic]

wait, i got the schrute quote wrong:

I never smile if I can help it. Showing one’s teeth is a submission signal in primates. When someone smiles at me, all I see is a chimpanzee begging for its life.

[Author]

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