Tuesday, November 10, 2009

What the heck is happening to this real estate market??

I am sure I am not alone in this..but I was amazed to see that we our $58k upside down in our house. Now, we are blessed and able to afford the payments that we signed up for 6 years ago. And, that is awesome. But, the house we signed up for at $318k 6 years ago is not worth about $260k at best.

Now, before you say "you haven't lost anything until you sell..I totally agree with that statement. But, what have you lost in the here and now? Well, you have lost any flexibility to accept a better job in another location. You have lost equity (and while that moves around a bit..you are still in the negative) and, some may say, you lose a sense of pride as the value decreases.

All this ranting is to say one more thing...credit in the hands of the irresponsible is a REALLY BAD thing! Lenders and borrowers alike that straddle the American econoomy with the sub-prime mortage industry are directly responsible for where we are today. Those of us that pay our payments monthly and struggle to make a life for ourselves, bare the burden for those that just threw up their hands and walked away from a committment they never should have been in.

OK..I will end my ranting. I encourage all of you to speak up when you see friends and family using credit badly. Call them into accountability...until their is a ground-swell, it will continue. I can't wait to see the fall-out from the "cash for clunkers" programs. But, don't worry Dave Ramsey fans...there will be some awesome "beater" deals on really nice repo's!


1 comment:

  1. Its the exact reason why I tell people to utilize creative financing, and buy an asset before buying a toy. Your house is not an asset. Many people say it is, but if it is not bring in a monthly income then it is NOT an asset. You have to buy an income property or two that will pay for your mortgage on it, and your "toy" which is your house. If you want a new toy, make sure you buy a new asset to cover it first. This way, if property values drop, you can care less because you aren't working hard for the money that is paying for it.