disenchanted with the burbs, looking to make a change (Austin: big house, transfer)

[mark311]

Originally Posted by mm57553

I'm also kind of wondering how you are underwater on your house in Steiner. Houses here have not really gone down in value in the last couple of years. Maybe if you bought in 2006 - 2007, but not just 2 years ago.

Unless the value has gone up about 6%, you're basically "underwater" if you want to walk away and break even. So if they paid $300K for their house in Steiner, they would need to sell it for at least $318K to cover all the realtors fees and anything else that would come up during the sale of the house. Of course they probably put money down so they might not owe that entire amount, but I would still consider it losing $20K in just a couple years no matter how much I owe on it.

[riaelise]

Originally Posted by mm57553

I'm also kind of wondering how you are underwater on your house in Steiner. Houses here have not really gone down in value in the last couple of years. Maybe if you bought in 2006 - 2007, but not just 2 years ago.

I know -- first hand -- several people who are underwater in Steiner, especially if you purchased in the newer sections during 2008 to present. One of the people I personally know who is underwater had to bring money to the table for a refinance. Probably the people who are not underwater are those who put a sizable downpayment and purchased in the older sections years ago, which were less expensive and therefore didn't go down in value that much.

[riaelise]

I live in the "boonies" and I don't spend a lot of time in my car. Major shopping is literally minutes away, and is bikeable/walkable if it wasn't so damn hot. I don't want to live next to commercial developments anyway. I think the only reason we meander into town is to do the occasional Drafthouse (but now that we have Flix, I don't really do that anymore either), Children's Museum, Austin Zoo, etc. Other than that, we spend our days in the suburbs.

[austin-steve]

Originally Posted by mark311

Unless the value has gone up about 6%, you're basically "underwater" if you want to walk away and break even.

Actually, 10% is a more accurate number to use. Most sellers, at closing, pay 8%-10% in total settlement statement costs. This time of year it's on the high end because property taxes are paid at closing for almost the entire year.

This doesn't include pre-sale prep costs such as painting, landscaping, de-cluttering, repairs and maintenance, etc.

So a buyer paying $300K for a house in 2007 still worth about $300K would clear net proceeds of about $270K with which to pay off the loan balance and keep the remainder. For people who wisely put down at least 20% downpayment, there is a 10% cushion even if the home value drops a bit. In that case, they may have "lost" some money on the buy/sell price differential, but they are not "upside down".

Steve

[CarnivalGal]

Steve sort of cleared it up. When I think of upside down on a house, I think of someone who owes more than the home is worth. In order to be in that situation where she lives and when she bought, she would have to have financed more than 90% of the house. If that's the case, then it was a poor decision which probably should not be made worse by doing the same with another new house. Hope I am explaining myself.

[riaelise]

Originally Posted by mm57553

Steve sort of cleared it up. When I think of upside down on a house, I think of someone who owes more than the home is worth. In order to be in that situation where she lives and when she bought, she would have to have financed more than 90% of the house. If that's the case, then it was a poor decision which probably should not be made worse by doing the same with another new house. Hope I am explaining myself.

The older sections of Steiner I think held their values moreso than the newer homes, which tend to be pricier. The 500-600K plus homes for at least two years haven't appraised at the amounts people have initially paid for them. I know of two who have fought TCAD trying to lower their appraisals based on this. I don't live in Steiner, so I can't comment really, but maybe there's a ceiling/cap?

[ladylonghorn2]

We paid just under 280k for our house in summer of 2010 (which did not seem unreasonable. All of the comps we were looking at were priced around that, and up to 300k). We put 10% down. The comps in my neighborhood are selling in the 230s. I recently had my TCAD value reappraised and they knocked 50k off their assessment.

[dave bacon]

Originally Posted by ladylonghorn2

We paid just under 280k for our house in summer of 2010 (which did not seem unreasonable. All of the comps we were looking at were priced around that, and up to 300k). We put 10% down. The comps in my neighborhood are selling in the 230s. I recently had my TCAD value reappraised and they knocked 50k off their assessment.

Sorry to hear that LL: Most people think property values should turn around here soon here, I sure hope so! If you think keeping the house is a good investment you may be able to benefit by refinancing, and with the new refi rules LTV should not be an issue.

[oldtoiletsmkgdflrpots]

Originally Posted by mm57553

Steve sort of cleared it up. When I think of upside down on a house, I think of someone who owes more than the home is worth.

That would make sense if "worth" wasn't relative.

[CarnivalGal]

Originally Posted by oldtoiletsmkgdflrpots

That would make sense if "worth" wasn't relative.

By worth, I mean market value - what they would actually sell the home for.