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Tuesday, April 9, 2013

Underwater homes cause for concern in U.S.

$$$ Three years ago, a friend of mine got what appeared to be a good deal on his first home purchase. He looked for over a year for a reasonable investment, a house that was in good condition that didn't need renovating. Right after the government's tax incentive for home buyers program expired, he found a house which had been fully renovated and reduced $40k. He jumped at the chance to invest.

Two years later, the fair market value of his "new" home has dropped another $38k, and my friend is drowning in his first architectural calamity.

"It's a buyer's market," one banker told me today when asked about the housing dilemma.  "That's happening everywhere," was the comment meant to make us feel better. She could be right. My church has just purchased a property for $300k that was listed at $1m last year.

When I asked his real estate agent about it, she said there are no guarantees in the real estate market. "No one has a crystal ball, but I bet your friend could still make a profit if he tried to sell now. My problem is that I can't find any sellers, and inventory in the affordable price range is low."

Guess all us mortgaged "owners" will have to ride out the storm and hope we don't sink!  My guess is that now is not the time to sell or buy, and that could make bankers and realtors unhappy. That could also stall the economy.  Don't we have enough to worry about, with North Korean threats and global warming reeking havoc on East Coast properties?

If you have a roof over your head, thank your lucky stars, or sell what you've got and buy an old van, school bus, or ark to wade out the storm.

The only good thing to invest in now is your soul!

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