patrick.net

If you bought a home to live in for the long term with reasonable debt to income ratio's what exactly would you be frightened of? You have to live somewhere. If the mortgage is in line with rentals in the area then who cares what the paper value of the house is in the short term?

Could the home for $165,000 have been picked up by an investor - or maybe someone with the inside info - able to get it for that cheap?

bob2356 says

If you bought a home to live in for the long term with reasonable debt to income ratio’s what exactly would you be frightened of? You have to live somewhere. If the mortgage is in line with rentals in the area then who cares what the paper value of the house is in the short term?

True.

"I know that no one has a crystal ball and real estate in local but I’m getting frightened. I bought a house 6 months ago for $290,000. Similar houses were selling for $470,000 in the same neighborhood in 2006. Last month a similar sized house sold for $165,000. I can’t believe homes have depreciated 310,000 (65%) in three years."

When ever you get something for (X) amount of dollars, that is what it is going for. If the seller could have gotten $470,000 for the house you paid $290,000 for. Do you think he would have really sold it to you?
If what you say is correct, then your house has lost $125,000. You should head on down to City Hall and get your tax nut down. Then sit down and relax. Just wait for all of this to play out. You are captive to the current times, but the future has limitless possibilities. Put you money in the bank, pay your mortgage if you can pay it down going forward. After popular economics has exhausted its self, those with Real Estate and especially with money in savings. Will be the smartest guys in the room.

If you like the place and are happy with it, then chase the tax roll down the hole, and enjoy the low interest rates, I hope you bought with.

I look at it like this, if I bought in the late 90's for $120K instead of $160K, but I paid 8.50% instead of 4.7% in interest.
I would be paying $150 more a month than I am currently paying just on the Mortgage.
You certainly didn't hear anybody bitching about what is, what might, and what they paid back then.

Stop looking at History and the numbers on the paper, and look at in real numbers.
Could you have bought it cheaper NOW, than 6 months ago, Yes and the interest rates are still low.
BUT, you will still be one of the people in the Future, that will say, "Well I was lucky I bought with low interest rates, and ended up paying 40% less in property taxes than when I originally bought it.
Remember you get to chase the value down with the taxes, but the city can't chase the values back up to tax you. Unless you make changes or refinance which calls for a new appraisal.

Foreclosures? meh just ignore them, they'll go away in the three years.
You'll be smart in a few years, with low interest and low tax.

Interest rates only matter if you're taking out a mortgage - not if you're a cash buyer.

Well let's not forget Mortgage is the Classic American dream.
Cash buyers and investors deserve the money they lose just as well as the money they make.
The RE flipping train has left the station. Anyone paying cash in this market is 100% certifiably Nuts!

I'd consider it in three years, or now, If I can buy a place actually cheaper than the plot of land it sits on.
But even then 30K-50K, most cases you have to totally gut and renovate those places. By time they are done, you will have put 40 to 50K on top the initial investment. Roof, kitchen, bath, floors, windows, electrical work. And these are 2br less than 1000 sqft houses. I figure 79 to 80K is what they'll be going for in three years anyway.

Thanks everyone for the feedback! This helps my anxiety level.

newhomebuyer7 says

Thanks everyone for the feedback! This helps my anxiety level.

If you're anxious, go run a few miles. That'll do the trick.

bob2356 says

If you bought a home to live in for the long term with reasonable debt to income ratio’s what exactly would you be frightened of? You have to live somewhere. If the mortgage is in line with rentals in the area then who cares what the paper value of the house is in the short term?

nailed it on the first reply. good job.

Exactly what part of Laurel would these prices be from?

I lived right at 198 & 216 (across the street from Home Depot) for 9 years once.

That's where I found this cat:

The key is to pay as little down payment as possible. treat your monthly mortgage + HOA + insurance + taxes as rent.

www.youwalkaway.com

zzyzzx says

Exactly what part of Laurel would these prices be from?
I lived right at 198 & 216 (across the street from Home Depot) for 9 years once.
That’s where I found this cat:

Laurel was like NOVA. For the same price in August I could only get a townhome for the price I paid for this house. I bought in Clinton, MD. 5 miles South of Andres AFB. BTW cute cat! :)

"I know that no one has a crystal ball and real estate in local but I’m getting frightened."

What goes up, eventually goes down. Doesnt take a crystall ball to see prices were not sustainable based on inflation and incomes, in any region.

http://www.housingbubblebust.com/OFHEO/Major/MidAtlantic.html

" I bought a house 6 months ago for $290,000. Similar houses were selling for $470,000 in the same neighborhood in 2006."

Well good that you didnt pork out $470K back in 2006. What were the prices before the bubble 2000, factor in inflation since, get you around where prices should be today.

" Last month a similar sized house sold for $165,000. I can’t believe homes have depreciated 310,000 (65%) in three years. Three more foreclosures went on the market this month. I don’t know how bad things are nationally but if it’s close to how things are going in this area how could there not be another housing crisis."

Prices going back to normality. This is not a crisis, its reality! There was no reason why prices should have gone up this much anyway, except for Irrational Exhuberance !!! Buy now or be priced forever.

joshuatrio says

If you’re anxious, go run a few miles. That’ll do the trick.

may want to take a couple of shots of some Jack on the rocks...

If you bought it to live in and you are comfortable (very comfortable with payments) than you have nothing to worry about.

If you like a total dummy bought it thinking that simply holding on to a wooden box will carry you into prosperity on a silver platter than it's a wake up call to reality.

Welcome back, newhomebuyer7.

You mean this one, right?

http://www.redfin.com/MD/Clinton/9511-Fox-Run-Dr-20735/home/10702585

Sorry to hear that. Actually I visited redpin the other day and I found home price in Clinton, MD area (I thought you bought there based on your comments in the other thread) is still declining. I was bit surprised by that because it already got hit hard and it looked like as low as it can get back in 2010.

Ask yourself if you can manage to live in there till the market rebounces again. If yes, you don't have to worry about it since whatever loss in the paper won't be realized as long as you're not selling it, and you will get it back when the market rebounces. If no, you're in serious trouble, and the trouble is not from the market trend but from your decision back in 2010. But if you ask me what I would do if I were in your shoe, I'd say... come on, you're not like those investment guys that have no soul. You made this far by living frugally for years and you kept yourself in faith. Is that loss only in the paper worthy enough to sell yourself? The mistake you made if there's any is that you're not able to wait back in 2010. Will you make the same mistake this time too? Please think hard.

I don't know if you read my another post or not. I've been in search of home in springfiled, burke and some other part of fairfax county. The market there hadn't crashed at all. Typical resilent area that goes down slowly, bounces up quickly. I'd be putting myself in the same situation as you are in now, if I buy home there in this year. Then, I have to wait till the market bounce up. It will be hard time, but I am sure I can manage it if that happens, knowing the market will bounce someday in the future.

@ Seaside. Wow! You hit the nail on the head. That is the home that went for 165k. Amazing! I have enough to sustain myself for a while (at least a couple of years) . The house I have is much better than the property that went for 165k. That property had no basement, the placement was bad, the house was not well taken care of, etc. I will stick it out for a while. Even if the worst case scenario happens I will be okay. I grew up poor and I'm sure I could make it again poor. For now I will continue to work hard and enjoy the fruits of my labor. If things get tight I will take up some high-demand trades and work 2nd jobs. Hard work doesn't scare me :)

Maryland is one of the nation's wealthiest state on the basis of household income but it's also about 15th in terms of foreclosures according to RealtyTrac. In other words, relative to income we have a disproportionately-high level of foreclosures.

That said, the foreclosure problem is not evenly distributed throughout the state and in some areas prices have had a slight up-tick. In rough terms, my neighborhood outside Washington is up about 2 percent in the past year.

Nomograph says

OurBroker says

Maryland

Three fourths of Maryland is on welfare.

Actually it's 95.3% of Marylanders are on welfare. Fact check buddy!

Property History for 9511 FOX RUN Dr

Date Event Price Appreciation Source
Dec 01, 2010 Sold (Public Records) $165,000 -15.3%/yr Public Records
Dec 01, 2010 Sold (Public Records) $168,000 -- Public Records
Nov 23, 2010 Sold (MLS) (Sold) $165,000 --

Feb 22, 2006 Sold (Public Records) $365,000 13.4%/yr Public Records
Mar 13, 2002 Sold (Public Records) $221,900 64.2%/yr Public Records
Sep 13, 2000 Sold (Public Records) $172,500 -- Public Records
May 04, 1999 Sold (Public Records) $53,784 -- Public Records

Do prices in MD double-triple in a few short years every ?
Doubtful... in this case 1999-2010 up over 200% in a decade

perhaps still overpriced... and still in a bubble.

newhomebuyer7 says

Nomograph says

OurBroker says

Maryland

Three fourths of Maryland is on welfare.

Actually it’s 95.3% of Marylanders are on welfare. Fact check buddy!

I know there had to be a good reason why O'Malley got re-elected by ~12 pts

I really wasn't expecting someone looking in Laurel to end up buying something in Clinton. I'm not familiar with Clinton, other than it's really not particularly close to Laurel.

thomas.wong1986 says

Property History for 9511 FOX RUN Dr
Date Event Price Appreciation Source
Dec 01, 2010 Sold (Public Records) $165,000 -15.3%/yr Public Records
Dec 01, 2010 Sold (Public Records) $168,000 — Public Records
Nov 23, 2010 Sold (MLS) (Sold) $165,000 —
Feb 22, 2006 Sold (Public Records) $365,000 13.4%/yr Public Records
Mar 13, 2002 Sold (Public Records) $221,900 64.2%/yr Public Records
Sep 13, 2000 Sold (Public Records) $172,500 — Public Records
May 04, 1999 Sold (Public Records) $53,784 — Public Records
Do prices in MD double-triple in a few short years every ?
Doubtful… in this case 1999-2010 up over 200% in a decade
perhaps still overpriced… and still in a bubble.

Housing really was that cheap around here not that long ago! It's way overpriced now. I only paid $34K for my place, and that was with closing costs included.

As an East Coast native, most of the people I talk to from that part country have been in denial since the peak. (MD, DE, VA)

The most common comment I hear is "prices never really got out of control during the boom in our area" and "prices have only dropped a little here."

The reality is that prices more than doubled during the boom (in most places), and they still are historically out of what they should be. My sisters house - purchased about 2 years ago is down $130k. While a home purchased by my folks in 1999, is still "worth" $100k more than they paid for it...

So you kind of see what's going on here. Will we get back to 1999 levels? There is a big difference between 1999 and 2003 - and it seems that we've reverted back to about 2003 at this stage in the game.

@zzyzx your cat looks like hitler...

@newhomebuyer Your underwater, wait 8 years you will resurface.
if you can afford the mortgage couldd be worse you could have bought in 08

josh

i think 02 is rational

zzyzzx says

Housing really was that cheap around here not that long ago! It’s way overpriced now. I only paid $34K for my place, and that was with closing costs included.

Very interesting stuff.

Thomas, here's some thing to think about DC metro area. Hope this helps you understand the situation.

DC metro area C-S talking about is huge area. I mean HUGE. It's consist of 52 counties all over the MD, VA, and even in WV. What C-S is telling us may or may not apply to certain counties in those 52 counties.

Home price went up almost all counties in DC metro during the boom. Less than doubled in many counties that are not close to DC, More than trippled in those counties that are close to DC. Clinton, MD where newhomebuyer bought is quite close to DC.

Interesting thing about DC metro housing market is, that it is consist of few totally different markets. What happened in those counties near DC after the burst is kind of extreme.

Home price in those traditionally wealthy counties in the west of DC haven't got crashed. 10~20% down from the peak, and slightly upticking in these days. It still is at somewhere b/w 2005~2007 level, of course, depending on the location. But, that of other counties mostly in the east of DC got totally bursted, Las Vegas style. 50~60% down from the peak, approaching 2000 level.

Back in Aug 2010, I thought home price in where newhomebuyer7 bought was as low as it can get. It was about 2002 level, and I thought that's reasonable considering inflation and development happened in the area. I also expected home price in those desirable area going down to 2002 to 2003 level. I was wrong at both.