Out at the peak

Wednesday, May 07, 2008

My old house's value has dropped nearly 40%

This is another good day that I'm so glad I sold at the peak.

The house became an REO and sold for 34% below the peak price. I'm sure the buyer thought s/he was getting a great deal.

The same model (one year newer) on the next street that is better (AC, granite countertops) is listed for 8.4% lower than the REO price. (Or a 40% discount from peak price.) It's been on the market for 48 days. We'll see what happens with the purchase price. This listing is a short sale (not REO), and it's $110K less than its last purchase from 2004.

If I held on, I would have a little equity, but not much. It would be a <2% appreciation YoY. That's less than inflation.

My old house was a new construction neighborhood in 2001. If comps get much lower (46.5% total discount from peak), then even original owners will be in negative equity position. I think that could happen by the end of the year. Ouch.


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