Sorry I haven't blogged for 3 weeks, but I've been out of town on vacation! No high speed internet, just dialup available where I was in good ole' "Hooterville," where they say, "the internet, what's that?!"
While away I did manage to read the Detroit papers daily via that slower than slow dialup and I noted that area home prices are down 18% from their levels of 3 years ago. WOW! That means a home that sold for 200,000 in 2004, today would sell for 164,000! Now if you paid 200,000 for that home in 2004 and put a nice 10% down and borrowed the rest, well, you see where I'm headed. You borrowed 180,000 on a 30 year fixed and probably today owe 173,000 or so on that mortgage. Meanwhile Mister real estate man (or woman) is telling you your home is only worth 164,000. This is what we call a "short sale," where the homeowner actually brings money to the closing table to pay off their mortgage, their real estate costs and taxes, just to get out of the house and move on. This is why not only in Detroit, but nationally, we're in the fix we're in economically. Plus here in Metro Detroit, we've been in a big economic turndown for the past 3 years anyway and the rest of the country is just starting to catchup with us.
If you're not in a "short sale" situation, good for you! If you're thinking about trading in that old home for a newer, bigger model, remember, your home may be worth 18% less than it was 3 years ago, but, that new home you're planning on buying is worth 18% less as well! So it all comes out in the wash. If you're waiting for the price of your current home to rebound to 2004 levels, good luck. It will take YEARS for the current market to recover back to those 2004 price levels, so if your planning on selling and getting something bigger and better, remember what I just pointed out. That new bigger and better home will be at a nice bargain price as well!!
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