Home values are up as the housing market recovers, but that's little comfort for anyone trying to sell their home in my Florida neighborhood after buying during the bubble. All of the original owners purchased their new construction homes during the absolute worst years of the housing bubble.
According to a recent article by CNNMoney, total foreclosure filings are down 3 percent in 2012 compared to a year earlier and down 36 percent since 2010. However, Florida along with Illinois and Georgia, is home to the largest number of zip codes with foreclosure rates. In Florida specifically, it takes 853 days for the average foreclosure to be completed. I can attest to the fact that there are still vacant homes in my subdivision that have been sitting empty now for as long as 5 years.
Finally breaking even
On the plus side, my husband and I figured out that we spent an equal amount of money paying our mortgage in the past 7 years as we would have spent on rent for a similar home. When we recently refinanced, I felt as though we were symbolically buying our home for the first time. If I look at it that way, I feel as though we are getting a good deal on a 4-bedroom, 3-bathroom home that is only 7 years old. We could afford to buy our home back with a 15-year fixed rate mortgage at 2.75 percent. Knowing that we paid as much money in mortgage payments as we would have paid if we rented, lets me psychologically wipe the slate clean.
Getting a good bargain
I truly believe anyone who purchases a home right now in most parts of Florida is getting a good deal. That's the main reason why we stayed in our home instead of selling it and finding something different. At the same time, it's not such a good time to be a seller for those of us who purchased during the housing bubble. Because of our refinance, I had to get a professional appraiser to come out to our home. She said 7-year-old home is worth $130,000 even though we paid $183,000. People who can purchase resale homes in good condition such as our home would get a discount off the bat of $53,000. Moreover, we spent at least $10,000 fixing up our home with new wood floors and landscaping.
Turning homes into rentals
Because of the lower home values, most people I know are renting out their homes instead of selling them. We have considered turning our home into a rental if we decide to relocate. We could get $1,300 a month if we rented out our home. Even though it makes more sense for people to buy a home rather than rent, many people can't qualify for mortgages. I recently spoke with a Realtor friend who told me one of the nicer homes he has sat vacant for the past year because none of the people who were interested could qualify for a mortgage.
Although my husband and I could qualify for a mortgage if we wanted to relocate, we are stuck either living in our Florida subdivision or renting out our home due to the decreased home value. We don't really want to become landlords, but we may be forced to do that. Some people saying the housing market is recovering, but for us it's an extremely slow recovery that may not make a real difference for us for another decade.
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