Peachie, you took the words right out of my mouth. We've all been through this and it is choices. In 1979 I couldn't sell my condo at all, no matter what price I listed it at, so, our "choice" was to rent it at a price that would just cover the mortgage (maybe even losing a little money) and we rented a one bedroom apartment for ourselves. We put ALL our furniture in storage and lived in a 500 sq ft apt. - 1 bdrm. 1 bath and left a 2000 sq ft condo for the renters. It was very easy to rent as it was in a desirable location and obviously desirable rental unit. This is a choice we made given the poor economy and real estate market in that year. We then saved our money for a year and until we felt we had adequate financial resources, we purchased a very small free-standing condo (home) with 2 bdrms and 2 baths and lived there modestly until again we we able to regain some equity and financial resources. This took about 4 years which was well worth it and established a strong financial situation for us. Then we were able to buy a large ranch home and lived comfortably for 17 years. None of this happens over night and unfortunately I think young people want things quickly and all at one.

Oh, and BTW, during that time frame 2 of my companies had closed down and I was looking for employment, the same thing happened to my husband. It wasn't easy, but we sure learned a lot from that experience.

Originally Posted by another Linda

And that is exactly my problem with the whole way this issue gets framed. You assume that the only people who are facing hard choices are the ones who have already lost their jobs or have bought homes that they couldn’t afford or spent too much money on toys and on and on. And I’m saying that there are lots of young couples who have saved up their 20% down, have a 30 year conventional mortgage on modest homes just like we did. But those homes are now worth a fraction of what they were. As long as they don’t have to move or sell the house, no problem – they just hang on. But what do they do when they have to sell?

And everyone has choices? Let me tell you a story about another couple. She bought a condo when she was single (yes, she could afford it!). He bought a house when he was single (and yes, he could afford it). They got married and moved into his house. Tried to sell condo and couldn’t. Not a problem as she was still working. Wanted a family. Saved money so she could be home for a couple of months – longer if condo sold. Problem pregnancy and ordered to bedrest. “Chose” to try to work a couple of more weeks until had saved enough. Had miscarriage. Problem solved. Yep they had choices. Very sad.

Can it really be that I’m the only one who knows these young couples? Can it really be that the rest of you only know the deadbeats? Hard to believe. Well, I’ll continue to stand up for the ones I know. They are good people and just as hard working and moral as we ever were. But they are facing issues we never had to face. Doing their own haircuts and baking won’t help them.

Another Linda. I certainly wasn't even thinking about your couple when I responded to your post. I wouldn't even think of folks I don't know as failures and I apologize if you felt that my answer was lacking in compassion or was too simplistic.

My daughter Helene has a mantra and I think it is a good one. "You can't have everything you want". Mine is, Well, if it's not cancer.......". Difficult times require a lot of character. I am sure the young people that you know have it, and if they are your children they will succeed with determination. After all, apples never fall too far from trees.

Accept my apologies. I always rankle when people assume that what we have now, we always had. I am so proud of what we have worked hard together to achieve.

We talk a lot about "choices," but the reality is the discussion is about "risk."

When we buy property with the idea that it will always increase in value, so the debt-to-equity ratio at time of purchase doesn't matter, that's a risk.

Where I grew up (in Boston) I can remember houses in the '60s and 70's where the value tanked and folks lost money. It happens.

Where I work and have a house (outside DC) the house I'm selling will result in an over-$100K loss from the original purchase price. My friend who came to DC with me chose to rent instead of buy. In the end, his overall housing costs will be much less than mine. It happens.

Friends who have "invested" (high-class word for "gamble") in stock, mutual funds, etc. which were to provide a rate-of-return higher than the run-of-the-mill savings account ignored the disclaimer that there is no guarantee now have paper-property worth much less than the amount "invested." It happens.

It's a tough fact of life that there are no guarantees in this world when it comes to money, value of property, profits to be made, or catastrophes (physical or financial). The younger the person, the greater the tendency to consider yourself immortal and/or immune to harm. The older the person, the greater the tendency to believe they are better-the average at assessing risks and good gamblers, and the mutual fund salesmen live on that perception, as do those who build casinos (who are their most frequent customers?) - as well as all of those credit card companies who flood mailboxes with "great" opportunities.

It's a shame that life can't be a rosy path to greater security, prosperity, property, et al. There's a lot of potholes and speed bumps on the path.

It's a jungle out there....

Like Another Linda, I have seen those I know caught in this quicksand through no fault of their own. Family friends. A young couple successful by all standards. She took a new job to do research. His company lets him work from home. Away they went. Go West, Young Couple. Go West.

They had a down payment. Bought what they could afford. They were responsible. They played by the rules. They thought they did anyway.

Nobody told them that there were no rules anymore. Their neighbors did not play by any rules. And neither did those who loaned those neighbors money. Speculators. Fraud. A government that did not care to watch. Why???? A lethal combination.

And this young couple did nothing wrong. Except for thinking that there were rules. Rules like there always had been. Rules that their parents told them about. Down payment. Buy what you can afford. You all remember those rules.

Now they are watching their hard-earned home lose value by the minute. They are surrounded. Multiple familes living in single-family homes. Neglected property. Swimming pools full of mosquitoes. No end in sight.

And researchers have to move for their jobs sometimes. Funding can run out for those projects. Then what? A hard-earned home that cannot be sold and a hard-earned PhD that cannot be used without the home being sold for a move. The American Dream becomes The American Nightmare.

I see the faces in this one, too, Linda.

Boomer

Now I am really depressed. I have made Another Linda dislike me and I lacked understanding of a simple problem.

Boomer, your post brought this problem into perspective for hard headed me.

Originally Posted by Guest

Now I am really depressed. I have made Another Linda dislike me and I lacked understanding of a simple problem.

Boomer, your post brought this problem into perspective for hard headed me.

GG,

It is a complicated and wretched time. And so many things are so hard to recognize and realize right away because it is so awful. And so different from anything ever before. If you do not want to be even more depressed, be sure not to read that link in my thread about the Business Week article. No matter what we have done right as individuals, we have all been betrayed.

But we will get through it. It will be harder for some than for others. And those who should be punished will not be. And our kids will always remember where they were at this point in history.

Sometimes it is so difficult to communicate in print. In a regular discussion, it all would come out so much better I think. Thank you for letting me know I helped with the communication factor.

And, btw, Mr. Boomer just said it is snowing out there in Cincinnati.

Boomer

Originally Posted by SteveZ

We talk a lot about "choices," but the reality is the discussion is about "risk."

When we buy property with the idea that it will always increase in value, so the debt-to-equity ratio at time of purchase doesn't matter, that's a risk.

Where I grew up (in Boston) I can remember houses in the '60s and 70's where the value tanked and folks lost money. It happens.

Where I work and have a house (outside DC) the house I'm selling will result in an over-$100K loss from the original purchase price. My friend who came to DC with me chose to rent instead of buy. In the end, his overall housing costs will be much less than mine. It happens.

Friends who have "invested" (high-class word for "gamble") in stock, mutual funds, etc. which were to provide a rate-of-return higher than the run-of-the-mill savings account ignored the disclaimer that there is no guarantee now have paper-property worth much less than the amount "invested." It happens.

It's a tough fact of life that there are no guarantees in this world when it comes to money, value of property, profits to be made, or catastrophes (physical or financial). The younger the person, the greater the tendency to consider yourself immortal and/or immune to harm. The older the person, the greater the tendency to believe they are better-the average at assessing risks and good gamblers, and the mutual fund salesmen live on that perception, as do those who build casinos (who are their most frequent customers?) - as well as all of those credit card companies who flood mailboxes with "great" opportunities.

It's a shame that life can't be a rosy path to greater security, prosperity, property, et al. There's a lot of potholes and speed bumps on the path.

It's a jungle out there....

True stevez, the "choice" a lot of people made was to take the "risk." Your quote on "no guarantees in life" is just what life is. I have friends that have bought homes without selling their condos first. They took a risk. They're both regretting the move because 3 years later they still haven't sold the condos.
Another friend is dieing of leukemia and bought a home in Port Charllote, FL with an interest only loan. How dumb can one get? It's been empty for 2 years and he walked away from the loan last month. He took the risk, even after asking my advice, and now whines about the $65K loss.
These people made "choices" that involved "risk" and lost. That's life.