Pinetop White Mountain Blog

Good Morning Everyone,

Today's Real Estate market raises lots of questions, one is whether holding on to an underwater property is the right thing to do.  There is no simple answer, the only answer is that "it depends".

The first thing you need to ask yourself is whether the home still meets your needs?  If it does, and the only reason you are considering making a change is lost value, maybe it makes more sense to hold on.  Oh, I know it is frustrating to pay for something that is worth less than it was when you bought it, but we do that every day in every other aspect of our lives.  

Consider this, you buy a new car and drive it off the lot and you have lost value.  Do you immediately decide that you don't want it any more because it isn't worth what you paid for it?  No, of course not, it is accepted because you need  the car to get to and from work, to take your children to school and activities, and because it is a necessity in your life.   

Why is a home so much different then?  You bought it because you needed a place to live.  A place to call home.  Yes, it is a much larger investment and it hurts to think you have lost value on the property but in truth, a home is a place to live.  It was never intended as a Short Term Investment.  Over time that asset will increase in value and the amount you owe will decrease and eventually things will even out. 

The point of this post is to help you see that just because your home has lost monetary value does not  automatically make it not worth holding on to.  Buying a home is not now, nor has it ever been, a get rich quick investment.  It is a place to live and to raise your families.  investing in a home is intended to be a long term thing, the phenomenon of the mid-2000's was not normal.  Values appreciated much to quickly because investors were artificially driving up values.  Get rich quick schemes and illegal dealing abounded.  We were all affected by the down fall of the Real Estate market.

So what can you do.  You can hold on because in many places values are stabilizing.  No, appreciation isn't happening yet, but it will.  If you are really hurting, contact HUD and look in to the newly revamped HAMP program.  You may be able to refinance to a lower value under the new HAMP guidelines.  Many of the past programs fell flat in many areas, but this one really has promise.  Go to www.HUD.gov to check it out.  Contact your current lender and ask them about the new HARP program.  That is truly the best place to start to get the information you need to see if this new program will help you. 

If that doesn't work or the home just doesn't fit your needs any more, contact a Real Estate Professional.  They can guide you to the individuals you need to talk to about making the best decision for your situation.  The market is troubled, there is no question about that.  There is help out there though, and things really are looking up - really!

Have a wonderful week.  Give me a call if I can help you with the tough decisions. 

Thanks for reading, until next time.....!

Sandra Paulow, Associate Broker, GRI, SFR, REALTOR® 928-242-0300