When I was a kid, our family moved a lot. My dad was a television reporter, so we’d go from market to market as his contract came up every two to three years.
When I followed my dad into the news business, I figured my path would be similar to his. Start in a small market, move to a medium, move to a big market, then start climbing the ranks.
But things changed. The move to Florida that both Lucas and I figured was a 2-3 year stint, tops, is now going on 8 years, and we’e now lived in our house for nearly 6.
And as much as I hate to admit it — we’re stuck.
I love our house, and it was the perfect place for us as poor newlyweds in 2006. Five and a half years ago.
We did everything right: got pre-approved for a loan, looked at houses whose mortgages would be manageable and wouldn’t over-extend our budget, found a place that had “good bones” but needed work, and spent months looking at our options.
When we finally found our current home, we knew that it wasn’t our forever place, but this was just our first purchase. We’d live here for a few years, fix it up, turn it around and then buy the next place — something bigger and better.
The thing is…we can’t. We’ve done all of the fixing up we can do, we’ve outgrown the house and I’m ready to move to a new place; I’d like to at least start looking at new places. I don’t know if we’d stay in Florida, or try on a new city for size, but I always thought we’d have the option. I thought we’d be able to break even or even make a little bit of money on the sale, and pursue the American dream — maybe three bedrooms, a few bathrooms, an office, a nursery…
We’re responsible homeowners who followed all of the rules, but we’re underwater on our mortgage. That means despite the fact that we pay a good chunk of change to our bank every month, and despite the fact that we’ve dramatically improved the home through renovations and repairs, we owe more on our house than we could sell it for. (Zillow is the best and worst thing to happen to home ownership.)
And that means that we have very few options.
1) Stay in the home and keep paying it off until we own it or the balance shifts.
2) Stay in the home and keep paying it off, hoping the market turns around and our home goes up in value.
3) Start a short sale, in which our bank agrees to let us sell the home for less than the balance of our loan.
There are more drastic options — foreclosure; walking away. Those might be better options if we were in worse shape, financially.
But we can pay off our mortgage every month. We can pay off our bills. We’re not in danger of defaulting, and we can, technically, stay in our home without any negative consequences.
And that’s the plan for now. We have jobs we love, friends we don’t want to leave and truthfully — we might choose to stay in Florida, even if we could sell.
I just hate knowing that we’re stuck.
About Katy
We bought our house last year so it was good for us in a buyer’s market. However, we don’t plan on being here forever either. Our house is a 3/2, so it’s big enough but my main thing is that it’s in the burbs and I’d like to move back into the city someday when we can afford it. But yeah, I do fear that we could be stuck too. The school district isn’t good so that could be a problem one day down the road. Guess we’ll cross that bridge when we get to it.
Lee recently posted..Rocktoberfest Half-Marathon
Going through something VERY similar right now – along with the rest of the country. *ahem* It’s tough! All we can do is make the best decisions we can for our families and know that things could always be worse. Good luck and hang in there …
Winks & Smiles,
Wifey
Wifey recently posted..On the Road Again
Seriously, my husband and I just had this conversation. Now that I’ve graduated law school we want out of Tallahassee and want to move on to Colorado and start a family. Thing is, we were stupid and bought a house three years ago when we thought we would stay here for a while and the housing market was so enticing (read: we hated living in apartments in a college town and we had two dogs so renting was hard). So yeah, we aren’t quite upside down on our mortgage but we won’t make anything in a sale and most houses in our neighborhood are taking more than 12 months to sell. We’ve made some expensive upgrades but I fear they won’t make a difference. When the day comes to move we might end up renting our house until the market improves. Like you, I’m just thankful we both have jobs and we don’t hate where we live.
Jamie recently posted..Teenage Mutant Ninja Pasta
Not a homeowner yet but hope to be one soon. We purposely have not purchased a home yet because we didn’t want to buy a “starter” home and then find ourselves outgrowing it. My hope is to buy one that will be where we stay long term.
Because frankly you can’t just buy, fix up, move, repeat so easily now because it’s harder to sell than buy with this market! Wish you the best in your situation.
Maybe as you make those payments try not to think about what it’s worth – just think about your end goal of paying off what you owe on the home. Nothing more, nothing less.
Holly recently posted..Post-Race Fueling & Hydration
I rent right now because I just graduated college and am on my own for the first time but I watched very carefully when the market crashed a few years ago. I watched good people lose their homes to banks only out to make a profit and it enraged me. I am sorry that you and your husband are stuck. It doesn’t seem fair that you pay your bills and are financially responsible yet are unable to pursue a better living arrangement. I’m sure the tides will change eventually for you. Hang in there!
Jennifer@ knackfornutrition recently posted..Double digits again!
I actually work in the mortgage industry and I come across this every single day. Part of my job is actually deciding what these people should do. Let me know if you ever have any questions!
Matt @ The Athlete’s Plate recently posted..Marzettia Otria Greek Yogurt Veggie Dip Review
I feel your pain – I bought my condo 2 years ago this month (when I thought the market was nearing the bottom – notsomuch). The value has continued to drop and my plan of selling it in a year or so is shot. I’m just going to hang on and hope it doesn’t take too long to come back. What goes up must come down… and vice versa, right?!
Laura @ Sprint 2 the Table recently posted..A Spoonful of Sugarland
This is exactly why my husband and I are still renting, that and the fact that starter homes in this area are still very expensive. We’ve calculated that it’ll take another 4+ years of renting to save up a 20% down payment for any home in this area. It’s really hard to get started these days. Jeff and I are doing fine financially, we make enough for us to live on plus more to go out occasionally and still have some left over, and yet we’re years away from buying a home without getting ourselves into a risky situation. It drives me crazy that even if you do everything right these days you’re still bound to get screwed somehow. Our parents just cannot understand how we can still be renting, but they all bought homes in a time when a home was truly an asset and renting really was throwing your money away in all cases. Now though, renting is cheaper than owning and at least it’s giving us time to save money.
Alayna @ Thyme Bombe recently posted..Toasted “kettle corn” pumpkin seeds
Oh yeah! I was also going to say that if you guys are planning to stay in roughly the same area, you could always try renting it. It’s risky since for any time that it’s not occupied you’re stuck paying two mortgages, but it could help you to wait out the underwater years and still get to move on to a new home. I think you can even hire a property manager for pretty cheap too.
I feel ya! We built in 2005 with the intention to stay – so in that way we are different, but it’s frustrating that our house is worth half of what we are paying for it. I know several people who have gone the short sale route and it’s only dinged their credit for about 2 years. I think there are just so many people in this position now! I would definitely attempt short sale before foreclosure (banks are so behind on foreclosures right now – it would take forever anyways) – but before you do ANYTHING get a lawyer!
Michelle recently posted..Weekly Menu & Workouts
It’s so frustrating to work so hard and do everything “right” and still not come out on top- I feel you on this one!
Heather @ Side of Sneakers recently posted..Smart Thinking Lifestyle Tips: Get Organized!
Hi Katy,
Very common situation now days. My heart goes out to you.
Have you considered the option of renting out your current home and buying another? It’s not an option that makes financial sense for everybody, but it is an option for many in a time when rental vacancy rates are extremely low in many places.
Granted being a landlord has it’s own issues (speaking from experience)
, but buying at historically low interest rates and near the “bottom” of the market (*hopefully*) certainly has its benefits. Just a thought.
Thanks for sharing,
Matt
Matt recently posted..100 Push-up Challenge Update
My sister is in the exact same situation. She is not irresponsible by any stretch of the imagination, but her home is now worth about half what she owes on it. She faithfully pays her astronomical mortgage every month, despite losing the job she had when she bought her house and now making about half as much as a teacher. My heart breaks for her. I wish she had other options but she is like you – stuck.
Callie @ The Wannabe Athlete recently posted..Cooking for Fall
I tried refinancing when the rates hit about 4% recently, and I couldn’t even do that because of the loan to home value ratio. So I guess you could say that I’m stuck staying or going. Depressing thoughts.
I’m in the exact same situation as you are – we purchased our home 7 years ago, made some upgrades & now we’re absolutely stuck. We always figured we’d need to move into a bigger place – we’re 2 bedrooms, 1 bathroom right now – and thought that in about 10 years we’d have no problem doing so. Now that “10 years” is only 3 years away and we are SO upside down there’s really no light at the end of the tunnel. We can afford to pay our mortgage and other bills but it’s so frustrating to see so many other people walking away because they were victims of the sub-prime mortgage market when there’s people like us – who did it right & got homes (and loans) that were well within our means – who are stuck, yet sticking it out!
Theresa @ActiveEggplant.com recently posted..The Need to Redeem
We will have been in our home ten years next month. We had to re-fi a few years ago (when rates were low) to do some major renovations, so now, well, we are about even. We might be able to sell and make a tiny bit, but nothing compared to what is should be worth. Luckily, we love our home and don’t plan on going anywhere. We bought into a good school district and relatively decent area, so we are settled. It’s not big, fancy, our exciting, but it works for us.
If we ever had to move, we’d be screwed like everyone else though. Who has 20% to put down on a house now?
Vinobaby recently posted..Legoland Florida Review
We are in a similar situation, although not too bad upside down. We have six more years before our youngest is out the door to college, so we’re hoping that things turn around in six years.
Karen Putz recently posted..Karen Putz
My husband + I are in the same boat with our mortgage. Guaranteed, right now we really can’t afford to move, but down the line we are hoping that we can move to a bigger place once we decide to expand our family even more. (1 baby in a 980 sq. ft. house is fine, but 2 is pushing it). We bought at the time when the market was good. A lot of people were selling and not a lot of people buying, but house prices were still up. Our home has dropped in value by almost $30,000 – the house across the street took a year to sell and really lowered our property value as well since it sold for much lower than what we bought for. Hopefully, the market will turn in a few years (hopefully less than 5 because we want to be in a different school district before our daughter starts kindergarten) and we will be able to upgrade + live the American dream a little more!
Kristen @ The Concrete Runner recently posted..adjusting
Oh, I can relate to this! We bought our first home in the west palm beach area when we were engaged in Jun of 2005 (yeah, peak of the market for ya right there!). 3 years later, after deciding we wanted to move back to NY we had to make the horrible decision to put it on the market for 10K less than we paid for the house. We were so incredibly fortunate to actually sell it (there were 50+ homes in our gated community alone that were for sale) but the deal ended up being for 70K less than we paid only 3 years before. I’ll never forget the title company lady saying to me on the phone “so, we’re going to need a check from you for 33K and change for closing. Look on the bright side, at least you CAN afford to pay this, so many people are just having to walk away.” IN retrospect, she was right but, it’s pretty damn hard to see the bright side in a situation like that when you’re losing that much money. Zillow now tells me that we were incredibly lucky though b/c the house continued to drop in value and is now worth 80K less than we SOLD it for, so half of what we paid in 2005. We ended up moving back to NY and living in my inlaws (vacant) house for a year to save up again before buying another house up here. I know we got a good deal on it b/c of the state of the market so hopefully we recooperate some of the $ we lost in FLorida. It sucks knowing you’re stuck and it’s tough to not just walk away like so many others even when you’re capable of paying the mortgage just so you can move on…
Gina @ Running to the Kitchen recently posted..Philadelphia half marathon training: week 6
We are in a slightly different situation, but feel your pain nontheless. We got married this year, both already “grown ups” i.e. established lives.. so now we have 2 of everything, including houses .. oh, and mortgages too. We aren’t underwater on either one of them, but we didn’t want to sell either one in this depressed market. We’re semi-reluctant landlords now as we are renting out one and living in the other. Not fun, but this too shall pass! Having great jobs and loving your life is a great foundation to handle whatever comes your way!
Mary @ TheWeightress recently posted..September in Review, October Goals
I think it’s about perspective. Don’t look at it as you being stuck, look at it as you being able to afford a house at all, being in a beautiful city with your husband and friends, and being stable. There are tons of people who can’t afford their mortgage and are afraid of losing the house they love, or some who can’t afford a house, period.
We bought just over a year ago – right before the first time homebuyers tax credit expired and when the market was at it’s all time low – so we’re pretty lucky. We have to stay in the home for at least three years to keep the tax credit. We are hoping that once the three years expires we can either rent the condo for our mortgage amount or sell it at a profit. At this point it’s a matter of crossing our fingers and hoping for the best. It’s only a 1 bedroom condo, so eventually we will grow out of it. I know getting involved as a buyer in short sales is a mess, I’m not sure about being the seller. I think as long as you are content you should stick it out for a little bit. I honestly believe the market has no where to go but up…
Amanda recently posted..State of the Plate DC: Meeting Robert Kenner
ohmygosh. This is basically the story of my life right now! We bought in 2006ish too, and what we thought was a great deal that we would fix up eventually is now a house that we really don’t care about and would move tomorrow if we won the lottery. Hopefully we will have saved up enough to start looking next year, knowing that we probably won’t get a ton for our current house, maybe not even what we paid for it. At this point though, it is a huge stress factor for us so we’ve decided that in order to move on with our lives and stop this house from owning us we just need to do it and bite the bullet on the money front. Stupid house market!! *Fingers Crossed* for new homes in 2012!
Kelly recently posted..Chewy Chocolate Chip Oatmeal Cookies
Sorry to hear you’re in that situation! I’m a realtor in Ohio and see people in your situation everyday. Have you considered renting until the market comes back? Depending on your monthly payment you may be able to break even and maybe even be able to pay a management company. There is Aldo another option called “deed in lieu” where the bank takes the house back instead of foreclosing. It doesn’t look as bad on your credit. It’s not easy and banks may not always do it, but it’s worth a try! Best of luck!
I live in Southern California so I feel like I will never own a home. Right now I live with my husband in a one-bedroom condo that his mom owns, but it’s been in their family forever and I don’t think they want to sell it, and besides the value on condos have gone down so much it’s insane. I try not to think about it because it stresses me out but I feel stuck too. I don’t see how we can have a baby in our tiny place and I don’t see how we could ever afford anything bigger so now only do I feel stuck living-wise but life-wise (i.e. family planning-wise) as well.
Hallie recently posted..Fitness Bucket List
We bought in 2007 in Polk County. If Zillow is accurate, the difference in what we owe and what the house is worth is well over $100,000.
I feel kind of stuck too. For the next few years, I am fine to stay in our home but I did not plan on retiring in this house. Plus we live far out and both commute to Orlando. We hoped that in a few years, we would be able to move closer.
Din recently posted..The Swiss Cheese Theory Of Life
We’re stuck in our place too. But, like you, we can afford our payments and will continue to pay every month until the prices go up a little more, or we pay off enough to break even on the sale. That’s all we can do is sit tight and wait. I refuse to short sell. Not if I can afford to keep making payments.
I really want to move out of apartments and into a house, but I just don’t know if now is a good time. I don’t want to get stuck in a house that isn’t what I truly want. So for now I just want to keep saving money and will hopefully move someday soon!
Amber K recently posted..Sweet and Sour Stir Fry
We are in the same boat in TX. Bought our home at the top of the market and foreclosures plus an excess of properties on the market mean that if we go to sell, we’ll lose money. It’s frustrating, for sure.
I’m not stuck in a house, but I’m in another version of stuck. I’m 700 miles away from my family in a job that’s not ideal but is paying much better than anything I can find back home right now. So I’m in a funny space between wanting to settle in somewhere but yet wishing it were back home and not here. I’m still single; so, it’s different than if I were moving off to a new place far away with a spouse. Stuck is a sucky feeling. I know what you mean that you might make the decision to stay even if you could leave (I could leave too, but the consequences are not ones I want right now), but knowing you kind of can’t feels bad.
Michele @ Within Reach recently posted..COMING SOON!!
So frustrating, isn’t it, that you’ve done it all “right”, and still can’t seem to catch a break and move on to something bigger and better? That, at least, is how my husband and I feel. We’ve been in our current home for over 3 years and have made payment diligently every month. However, instead of potentially selling soon, we refinanced instead (rates are super low right now!) and our paying down the principal in hopes that the market will shift a bit, and then we’ll be in a great position to sell in another year or two.
Have you considered or explored refinancing at all?
Megan @ On the Road Again recently posted..The Cupcake Classic 3.7-Mile Virtual Race Recap
I really want to move out of rentals and right into a house, however just don’t know if now is a fun time. I don’t want to get stuck in the house in which isn’t what I wish. So for now I just want to keep saving money and can hopefully shift someday shortly!
May recently posted..How to Make Him Fall in Love With You
We just bought a townhouse this year and I’m really happy with our decision. We’re in B.C., Canada so the housing market isn’t AS tumultuous as some places in the states. The place we bought is really close to the university in a big university city so I know if worst comes to worst we could always rent it. Have you considered renting yours or would that not be a good option?
I know a lot of people who are stuck too. You definitely aren’t the only ones!
Ugh we are in the same situation in the same market! My fiancé bought his house in downtown Orlando right before the market crashed. Our house is so tiny–there’s no way we could ever start a family here but we’re paying way more than it is worth. I feel so stuck!
I’m in the same situation. Could you rent out your house and almost break even on what you’d collect on rent til the market turns? That’s our plan. And then sell whenever it tips.
my husband and i own our home in southern california and while we’re not underwater, we bought soooo high compared to now, its almost sickening to see homes for sale in our neighborhood. sometimes ignorance IS bliss.
skinnyrunner recently posted..The C5
I am in the SAME place!!! It drives us crazy. I would love a new place.
Tina @ Faith Fitness Fun recently posted..Balancing Treats
I’m fortunate that my husband bought our house before the market really peaked here, so we’re not underwater, although we have several friends who are. One friend of mine wound up renting out her condo when she bought a house with her fiancé – the condo wasn’t big enough for both of them but she couldn’t afford to sell it at a loss. It’s unfortunate that you and Lucas are stuck in this position for now. I’ll keep my fingers crossed that things turn up soon and you’re able to have more options.
Dawn recently posted..In Memory
I’m most definitely stuck and it sucks. It sucks more when your neighbors walk away or get foreclosed on and make already depressed values even worse. I’m probably underwater by about 60K now and I didn’t do anything wrong. I paid what the builder said the house was worth in 2005. I’m lucky that we have enough room for our small family and even another child. However, the home I live in is the home I bought as a single woman and I would love to purchase a home with my husband so it can truly be “our” home.
I’m a fan of Dave Ramsey though and I know that if we really, really wanted to we could buckled down for 5-6 long years and pay the mortgage down so that we could sell or move. It just hurts to purchase something that should be an asset and have it become a liability.
Amen. Sister.
All we can do is make the best decisions we can for our families and know that things could always be worse… I just want to keep saving money and can hopefully shift someday shortly!
nicole recently posted..flat rate movers nyc
We’re in EXACTLY the same situation as you and it is so defeating. We live in Silicon Valley (of all places) and things are as bad here as they are everywhere else. We’re stuck here because of jobs, but basically paying too much for very little. And it’s all because we were responsible homeowners like you.
*sigh*
All that said, I’m very grateful to have a home at all. I know so many are in a different boat.
Molly @ the F-spot recently posted..Trick or Treat?
Our parents just cannot understand how we can still be renting, but they all bought homes in a time when a home was truly an asset and renting really was throwing your money away in all cases.
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Thank you for sharing your experience with us! Have a great weekend!