Quote:
Originally Posted by wendyquat
I am totally amazed at how distressed the market is here in Phoenix. My brother got a "great deal" on a 4 BR 2 1/2 bath 2600 sq. ft. home built in 2006. The original owner paid $240,000 and died. In 2008 his son sold it to my brother for $160,000. Thinking he got a great deal, he put several thousand adding plantation blinds, upgraded light fixtures and fans and landscaping. Right now, similar homes have sold recently for less than $80,000. Most people are "upside down" and owe more than the house will sell for so many are facing foreclosures and some will just have to "walk away" if they are faced with having to move from the area. No one can "put their finger on" what caused such a downturn - - just supply and demand I suppose.
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When a home is sold at a loss, due to foreclosure and short sales, than the other homes around it are devalued. Now this only comes into play when someone tries to get a mortgage. The appraisal is based on what other homes in the area sell for. So what has SEEMED to have happened, and maybe this belongs in political, is that people who didn't have the money to pay for a home were given a loan for a home and they defaulted. It is our American generosity that probably caused it. We want everyone to be happy.
I remember when we were kids buying our first home and we scrimped and saved and went without to have the 20% down for that conventional loan. AND we figured and refigured our budget so that we could make the payments on that home that cost $13,900. We had one older car and I cut my own hair.
So here we are. We somehow survived all those "deprivations" that everyone was doing at the time.