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In my recent story about the underwater data, I included a quote from real estate analyst Gary London:
Continuing economic strife and a rising unemployment rate could put more people in a position of distress. For all other homeowners, [London] said, “This is the time in the market when you keep your blinders on.”
“If you sell right now you’re by definition either distressed or stupid,” London said.
I heard after that story ran from reader DF, a homeowner in North Park, who shared his situation and a dilemma — would selling in this market make him stupid?
We bought a small house before the bubble, and at the peak, our house had more than tripled in price. We often looked around to see how we could upsize in the last few years, but the houses that we’d move up into were that much more expensive as well. Though we could have afforded the bigger houses thanks to our equity, the property tax bill on the new house always busted the budget. So we stayed put.
Now that housing averages are coming back down, why is it so crazy to be selling a house that would still sell for double what we paid, and upgrading to a bigger house that will now have a MUCH smaller assessed value and tax bill? What else lingers out there in the market that makes this move “stupid.” I’d love to know, because I’m considering it as an option. I’m not distressed, but perhaps I am stupid.
What do you think of DF‘s dilemma? Send me your thoughts at firstname.lastname@example.org and I’ll include some in a follow-up post.