I hear you.

Similar houses in my neighborhood are selling for less than 1/2 of what we paid five years ago. As is.

And we've put in a new high-end kitchen, docks & boat lift, new seawall - none of which helped our re-fi appraisal last year. The new pool/spa and paver deck might help us a bit - thinking about re-fi again with the big drops in rate.
We put a lot of cash in, so at least we're not underwater.

And we love it here, living in paradise, and the kids got into the top local schools, and lots of friends and memories made since we haven't had to move and don't anticipate moving (20 years of military moves have taken their toll).

thanks C9 - I know a lot of people are in this position. You have a real nice place - I remember the pig roast photos, your nice neighbors and the boats. Your kind of place is what I had envisioned in my future, when I retire.

I was expecting to have to pay a premium price for my lake front home on a wooded lot, with a nice little boat dock. The sale of my existing house would help finance that. Wrong! I instead helped finance the previous owners' dream home - they made a $200k profit over what they originally paid! Nice to be them, sucks to be me.

Theres a lot things I would like to do to my house, but I already have paid too much and never will see a return, so now I am scared to sink any more money into it. I guess I may as well get over that fear and just spend for things to make my life more enjoyable. It's not like I am going to live forever and it's not like I can take it with me!

Probably no consolation, cas66, but likely the previous owners went and bought something equally overpriced.

"Probably no consolation, cas66, but likely the previous owners went and bought something equally overpriced."

Not always.
We got $200K more than we paid and despite paying off a previous cash out refi, a second mortgage, and some debt we still managed to pay cash in full for the new house.
Much smaller footprint, energy efficient, and economical for retirement.

If it is any consolation I feel terrible for the couple that bought our house but at the time it was priced competitively and no one held a gun to their heads. I knew the market was fixing to tank but somehow they missed the memo and were dazzled by the yard and pool area.
I still feel guilt on some level even though I know we did nothing wrong- they were just young and foolish.

To add insult to injury that area (Broward Co. South Florida) took a very nasty hit when the bubble burst and this same home was just recently sold for less than we paid for it back in '91.. a mere 26% of what our buyers paid for it in early '07.
Clearly they lost their shirts or walked.
The photos of it on Google Earth show that it has fallen into disrepair and the landscaping let go horribly. I drove through the neighborhood last fall and was shocked at how it had deteriorated- it wasn't crack house territory but it certainly seemed to be headed in that direction.
It is sad all around as I loved that home.

If that hasn't happened to your new neighborhood then maybe you are in better shape than many.
As long as you love your home and the neighborhood you should accept and move on. No one knows what the future holds and you made what you felt like was a wise decision at the time. Sometimes you win and sometimes you lose and perhaps next time around karma will smile on you.

I'm in a desirable town in the LA area and we have a wide range of winners and losers when it comes to real estate. Many who bought in the 2000-2002 years are selling now and making a $1 mill profit. Some who bought in 2007 are selling and losing $800K.

It was a crazy bubble here and some of the prices paid by people were just insane. Many paid top dollar for a crappy house in a crappy location ... those are the ones taking the biggest losses as buyers are now being more picky. Great houses in good locations are still getting top dollar, with some even getting multiple offers. We have a few short sales and foreclosure, but they are a relatively small percentage of total houses for sale.

I agree with turtleshope!

Whenever I think about the fact that my house is probably worth less than what I paid for it in 2005, I check the listings of my former townhouse community. In 2005, we sold our townhouse for $220,000. The same model is currently listed for $145,000 today. That's a $75K difference. Huge. The single family house market in our current town is much more stable. My guess is that our house is worth within $20K of what we paid for it in 2005. I'm so glad we moved when we did.

You haven't lost any money until you sell it. Historically houses are not such a great investment anyway, but still it's nice to have the luxury of your own home.

I feel your pain, ragtop.... so many of us in the same boat! We sold a home in late 2005 when we bought this one. The couple who bought that house needed to move in 2008 (lost job) and the house is STILL on the market. Housing prices and sales inthat town tanked in a big way. We bought this house for $600k; it was in mid-renovation. I took an appraisal course right after we bought it so I would know how to spend money very specifically to make sure the continuing renovations added solid value. We did the interiors over the first several years and finally finished the exterior renovation this past year. Total cost of the renovations were about $400k. Value of the house today? IF we could sell it, I'd say it would fetch about $650,000. It's on twelve acres of conservation-managed land with underground springs, two creeks, a pond--- all stuff that has to be kept up and cared for and the maintenance costs would make a grown man turn pale. This is our primary residence and we now jokingly refer to it as our mausoleum. My new mantra is "resale is the kids' problem"....

Don't feel bad. We overpaid for our 2bd cottage during the 1989 RE bubble. When the Loma Prieta earthquake hit three months later, the house had already been gutted for remodeling. Had no choice but to keep on throwing money into it. RE prices fell 36%.

I really felt we would never, ever see any profit from this house - it bankrupted us after our partner (who had invested in several houses to try to flip) had to file for bankruptcy.

Took 8 yrs before RE values started to rise again. Then they skyrocketed, then fell in the 2008 chaos. But as the short sales and foreclosures work out of the pipeline (yes, I know there are more to come), prices have started to stabilize and even increase a bit for well-maintained homes.

So we're still ahead of the game. Not by much, but rents are increasing fast in our local market which inevitably pushes home prices up too. Where we live, they don't build SFH any more, land costs too much.

One thing we did that really helped: paid off the mortgage as soon as we could. Makes a big difference.

Chispa, you inspired me to go look at our old house, which we sold in LA at the end of 2007 and was listed again in the fall. The buyer sold it in March and took a 22% loss. Ironically, he sold it for close to what we paid for it, his loss was our gain almost exactly. We were in it for 4 years, and when we bought it, the previous couple made a 75% gain themselves (over 10 years).

LA real estate is loony.

I feel terrible for him, but it appraised fine at the time. I thought that selling would be harder than it was...I would never have bought a home in LA that year.

As it was, we moved to a bubble-free zone, and our current house has maintained its value, although it hasn't appreciated. So glad we got out when we did.

Cass66, I could have written your post!

I've certainly called myself an "idiot!" I am less stressed about it than I once was, but it has been an emotional roller coaster. Our value currently, according to Zillow, is $82,000 less than what we paid in 2006.

We've also been updating and improving the house, inside and out, continuously over these 6 years. I say that just to note that I have not given up on the house by any means. I take excellent care of it, and have invested blood, sweat and tears (& plenty of cash) since the market crisis hit. Some would say that makes me even more of an "idiot!"

I've gotten a lot out of reading everyone's responses to your situation, so I thank you for posting. I can always benefit from seeing this through fresh eyes.

I agree with jkom51: "One thing we did that really helped: paid off the mortgage as soon as we could. Makes a big difference." That's my hope...and that's what we're doing.

When you say--"I still know whenever I do move, I am looking at a $150k loss." I say--Not necessarily. You may not make the profit at sale time you would have in years past, but I do think the loss will not be that substantial some years down the road. I think the housing market is finally bottoming out and even bouncing back a tad as of this summer.

Hang in there. I know it's hard, but you just have to believe it will all be okay. Being negative just draws in more negativity to our lives, so Try to think positive and take good care of your house (& yourself!) in the meantime.

Thanks to everyone who responded with similiar stories. I knew I wasn't the only one in this predicament. Even though I am very sorry to hear that you guys also overpaid, it does make me feel a little better knowing I'm not the only one. I know I made some pretty big mistakes along the way, but I also know I was just a victim of the market. The sellers made out like bandits and I was on the wrong side of that. Oh well.

A suggestment was made to pay off the house early - which is great, very effective advice. We have already been doing this. This is our ONLY way to combat this problem and "get back" the money we lost. We expect to pay off our 25 year loan in only 10 years, and we will save A LOT of money in doing so.

I also realize I haven't lost any money until I actually sell it. We weren't planning on selling anytime soon anyway. But I still can't imagine this house EVER reaching the value it once had.

I had only noticed this particular "bigger but less expensive" house only because it is in my neighborhood. I hadn't looked at realty websites in a long time, and it prompted me to look again. I then looked at houses more comparable to mine and had the "pleasure" of seeing that I indeed have lost A LOT of money. I wasn't the least bit surprised. Oh well, too bad, sucks to be me. Nothing I can do but get over it and stop being such a whiney crybaby. I do know that in the end, money is really meaningless. Yes, it can make life easier, but as long as you have a roof over your head and can put food on the table, that's all you really need.

Good luck everyone!

Cas66, you've probably gotten what you needed here from this thread, so I don't mean to beat a dead horse by commenting again, but I hope you remember, as others have noted, that you haven't "lost" yet. Until you sell, you don't know for sure what will happen.

In spite of the almighty Zillow stats, and even neighborhood "comps," at the end of the day a house is worth what someone is willing to pay for it! You only will need one buyer. Someone may fall in love with your house and feel that it is, in some important way, set apart from others they've seen and be willing to pay more than you expect for it.

As I mentioned, I really relate to your story and your mindset, but I hope you can shift your attitude and be a little more positive. You just don't know what's going to happen, so imagine that something good could happen just as easily as something not so good. Even if you're convinced that the general outlook is doom and gloom, tell yourself, "That may be true, but MY house is different. All will be well."

Stinky,
I love your positive attitude, but even if an off the wall buyer might fall in love and be willing to overpay for a home, the appraisal will bring all back to reality.
Cas66, you have 10 years before you come down to Lake Norman and let me find you that retirement lake house. In the meantime, every time you feel a little down because of the RE market, just look around and see those who are in real dire straits.

NCrealestateguy, how do we know for sure at this point that the appraisal won't come in? I'm talking some years down the road, as I don't get the impression Cas is ready to sell right now. In the scenario I mapped out, I don't envision the new owner to be "an off the wall buyer" or that that buyer would be "over" paying.

My point is, we don't know what the figures will look like in 5, 10 years. We may think we do, but we don't.

You're the expert NCguy, not me, granted, but so much of this is like reading tea leaves. Afterall, who knew the economic downturn was going to hit, and impact quite the way that is has? (I know...many say they saw it coming and in graphic detail!)

As for me, I am dedicated to taking care of my house and improving it, to the best of my ability, while not making outlandish changes that would be inappropriate to my neighborhood. I have faith that down the road, I will do fine when I sell, even though I "over" paid and indeed, was "an off the wall buyer" myself.

Having said that, I DO think that people who bought in 2005-2006, who need to sell NOW, are in difficult straits. It's a shame that they can't wait it out. That paper loss will become real for them, and as one who looks at real estate daily, I know that there are plenty of people out there right now in this unfortunate circumstance.

Some are choosing to rent out their houses if they must move, and rents, at least in my area, are quite high. That is a saving grace for many. I personally would not want to rent my house out, but it's a solution for some.

Anyhoo, we can imagine the best as easily as we can imagine the worst, and so we might as well have faith in a good outcome.

Stinky wrote:
"In spite of the almighty Zillow stats, and even neighborhood "comps," at the end of the day a house is worth what someone is willing to pay for it!"

This is primarily what I was responding to. To say that a home is worth what a buyer is willing to pay for it in spite of neighborhood comps is just not so. Everyone on this forum has heard of stories of sellers who got a buyer at a certain price, only to be brought back down to reality by the lower appraisal.

Stinky also wrote:

"Anyhoo, we can imagine the best as easily as we can imagine the worst, and so we might as well have faith in a good outcome."

Now we're talking the same language!

I hear you, NCguy! I really do. I just am not ready to concede that Cas66's situation will "be brought back down to reality" by a lower appraisal. Who knows what the "reality" will be when the time comes? Maybe we should agree to disagree and have this conversation again in 10 years, lol!

Even in today's less than stellar market, I know a house on my block sold for way more than it's Zillow estimate about 6 months ago. It's a similar house to my own and it sold for $3,000 more than mine did in 2006. So, it appraised for a "2006" sort of price, evidently, and got an offer at full asking price within 27 days.

This example struck me as a "one buyer who fell in love" scenario, and the bank made it happen at that price point. Also, if a buyer comes in with cash, the appraisal point is moot, yes? If a buyer shows up with a large % downpayment, does that sweeten the deal in the bank's view too?

Of course, you can answer these questions in the context of today's world, but if we're trying to predict a 2022 world in 2012, we are really just wool gathering. As rapidly and radically as things tend to change anymore, it's all a huge guessing game.

Working in the real estate biz must be very interesting!

Real estate tends to be boom/bust in urban centres.

Based on current sales, our latest buy is up 19% since July. Making me feel like a genius investor, if I didn't know better! In November, the average detached house here sold for more than C$1.8 million (U$1.4m.)

Our main business is mortgage lending. Soaring prices make us nervous!