Property Values

[Myhearts]

My home was appraised in April @ 345k and just recently it was guesstimated at being 300K.  Is this possible?  Do foreclosures and economy cause this?  this is unreal and I can not get refinanced because of this.

Hearts

[Lel]

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@Myhearts wrote:

@Anonymous home was appraised in April @ 345k and just recently it was guesstimated at being 300K.  Is this possible?  Do foreclosures and economy cause this?  this is unreal and I can not get refinanced because of this.

Hearts

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Yes, in this market environment this is possible, unfortunately.  Many people are in similar situations where their property values have dropped to the point that refinancing is difficult to do.

[Anonymous]

Yep- $450K in 2006 to $350K now for me.

Good thing I only owe $95K on it.

[ShanetheMortgageMan]

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@Myhearts wrote:

@Anonymous home was appraised in April @ 345k and just recently it was guesstimated at being 300K.  Is this possible?  Do foreclosures and economy cause this?  this is unreal and I can not get refinanced because of this.

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When there isn't as much demand as there is supply, what usually happens is the value of the product (homes) declines... this is what you are experiencing now.  If you are looking to refinance because your rate is about to adjust, I'd recommend you get in touch with your mortgage lender and try to work out a loan modification where the rate is fixed in for a longer period of time (1 year, 5 years, the remaining term of the loan, etc.).  If you are just looking for a lower rate, or take cash out, then you'd have to wait until home values go back up.  It's tough to say when that would be, a month ago I'd estimate that would be sometime in 2009, but with the recent economic situation I might add another year or two to that estimate.

[Anonymous]

My house dropped 20k in value from June to September.

[cobra19]

Take heart, Myhearts. Mine has gone down 200k between December 2006 and July 2008 (date of last appraisal). I am on north shore of LI, NY.

401(k) is -13.9% this year.

[Myhearts]

OMG! Cobra..  That is really horrible and to think that our homes are our most valuable asset.

What are we supposed to do now?

hearts

[Anonymous]

I guess we're all supposed to just sit tight for a couple of years.

We're in an ARM that was supposed to adjust this past August, but thankfully our mortgage company locked our rate voluntarily (we didn't even ask them to) - but as for how long, who knows?? And we wanted to refi next year and cash out to add on an extra bedroom. Guess my boys will have to share a room for a little while longer...

Oh, and I've been watching our 401(k)s accounts dwindle too - I've lost about 14.7% and DH has lost about 17.3%. YIKES! Good thing we won't be retiring for another 30 years or so.

[Anonymous]

I just purchased a house that sold in 06 for 587K and we just bought it for 315K with 18 K in concessions from the seller.  Even since June, the value of it had dropped from 350 K down to the 315 mark.  Now it has been kind of flat.  It may drop a little more but I don;t see it dropping below say 280K and ten moving back up.  I am already upgrading it myself for low cost (but good upgrades) to offset some of the declines that may come in the market over the next year or two.

I have no need to move for at least 10 years and have a fixed rate so I am good to go at this point, but this market has been a killer for a lot of dreams (good and bad ones)

[Junejer]

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Myhearts wrote:

OMG! Cobra..  That is really horrible and to think that our homes are our most valuable asset.

What are we supposed to do now?

hearts

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ETA:  I had typed in something, but it didn't post for some reason.

Robert Kiyosaki says that our homes aren't assets, they are liabilities.  An asset is defined as something that pays you.  A liability is defined as something that eats you.  As a banker, it is hard for me to redefine these things, but I am changing my mind about them.  My house, as much as I love it, will eat me in hard times, and is therefore a liability, not an asset.

Message Edited by ByrdMan on 10-10-2008 12:16 AM