The real estate market was still hot when I looked at a condo in October 2005. I closed on the 1,600 square foot condo for $482,000 in December 2005 at the height of the bubble. A few days later I had a bad feeling and put the unit back on the market. While I owned it, I got a hurricane assessment. I had to carry the condo for 6 months and pay back-to-back real estate fees but I unloaded it for $492,000 in June of 2006 - losing about $50,000 even though I sold it for $10,000 more than I paid. I just checked on the unit today and the market value now is $305,000. If I had taken the Realtor's advice and rented it for a couple of years and sold it this year, I would have lost about $200,000 instead of the $50,000 I lost two years ago. I think I made a lucky move.
6 comments:
Wouldn't exactly call this luck, more like you are an optimist.
Just curious, was this condo bought as 'investment' property? If so, you're smart enough to know that investments like this are risky and it was possible to lose. If so, you did a smart (and lucky) thing by selling.
If this was to be for you to live in for several years, the issue of property values might not have much effect on you. Yes, you'd be paying a mortgage propbably higher than you should. But you'd also have a roof over your head and you would need to compare your mortgage payment with what you could find to live in if you paid that same amount as rent somewhere else. In addition, if the value goes down your tax bill would probably drop and the payment would also.
I know it would take many years for the value to go back up to what it was, but until you went to sell, it really wouldn't matter what the value was at any given date.
Silver makes a really good point. I remember friends saying how lucky I was to have my modest little house that was "worth" about $600K+ at the peak of the bubble. It's now down to about half that, if I could sell it. The peak valuation didn't matter then, and the current one doesn't matter much now, since I have no plans to go anywhere anytime soon. When it comes time to sell, it will be a different story I guess, but for now I'm happy to have that roof over my head in a location that is relatively safe and convenient. Buying a home used to be about having a home,not necessarily about making a buck.
You clearly did NOT buy your condo at the height of the real estate bubble. Rather, you were fortunate enough to find a schmuck who did! Congratulations!
Well done.
Thumbs up!
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