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I've developed a strange addiction to Zillow.com. I find myself compelled to look at the "Zestimate" or the value of my home as estimated by the home and real estate database. I tend to look at Zillow about once a month when I receive my mortgage statement in the mail.
Here's the thing. I'm trying my best to pay down the mortgage of my home in Florida. But every month, the value slips even further. According to a Yahoo real estate article, Florida is No. 3 on the list of top 10 states sunk by underwater mortgages. Evidently, 44.2 percent of homes are underwater in Florida. The median home value dropped by 44.8 percent since the peak. Moreover, Florida has the largest percentage of homes in foreclosure at 17.4 percent.
We purchased my home for about $183,000 in 2005. It's now worth $109,600, according to Zillow.
At times, I've been able to get right side up on our mortgage by aggressively paying it down. But lately I've been shocked by how my efforts to pay extra still can't compensate for the rapid decrease in property values.
At this time, my unpaid principal is about $112,500, which means I'm back to being underwater by about $3,000. I don't have an extra $3,000 lying around to send the mortgage company. And, even if I did, it would not stop my house value from decreasing by another few thousand as the year progresses.
When will we find a bottom?
The question is: When will house values truly reach a bottom?
Although my house value keeps going down, I take some comfort in the fact that a friend was able to buy a short sale in my area for $92,000. Her value has maintained a steady $99,000 for the past several months, which is obviously more than she purchased it for.
Although I'm not a real estate expert, I tell my friends and relatives who want to buy real estate in Florida to go for the short sales. New home construction still seems overpriced to me. Foreclosures are often risky since homes may be sitting vacant for years.
As for me, I will hope to pay off my mortgage so I can enjoy being completely debt free.
What's the point in moving?
On the bright side, taxes are low. Maybe the value of my home will sink another $10,000 to $20,000, but I don't care. I'm tired of waiting for the housing market to bottom.
In some ways, I think peaking at Zillow.com keeps me motivated to pay down my mortgage. I make it a competition to try to stay afloat. The real bottom line is that we just aren't going to move anytime soon. And for those Floridians who have to sell their homes to move, they really are sunk.