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November 2008
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Mortgage Looney Tunes

Just about every house blogger is being affected by the cratering in home values, and is probably thinking about having a panic attack. You bought a house, have a mortgage, and are remodeling or restoring it. Meanwhile, next door, down the block, around the neighborhood, for sale house signs are springing up saying Bank Owned, Auction, Short Sale. A far cry from 3 Bedroom, Gorgeous Inside!
You look at the sale prices, look at your mortgage, figure out what you are spending on your projects, and want to panic.


Home Value in dollars and cents is an artificial number, based upon
sale price, which over the past few years has been artificially
inflated through any number of reasons, most of them a financial
engineering, greed fueled carnival of bullshit.

I live in an rainbow coalition, bad side of the tracks,(according to the city fathers) old neighborhood, (houses here were built in the early 50's) the house next door was sold for 1/2 of its last purchase price, and a house flipper is busy putting lipstick on it. It is good lipstick as they are putting in a new roof, new HVAC unit, and some double glazed windows, which here are necessary, not because of the heat here in Phoenix, but because of the airplane noise. Did I mention that I live directly under one of the landing patterns for the airport? That there is one both north and south of us as well?

But my neighborhood is probably a lot nicer than yours. Not as pretty, certainly not historic, but we have what so many neighborhoods lack. We sit on our porches, kids play in the street, we watch out for each other. We are all taking a hit.

Your value is taking  a hit, but you are making a long term investment. Yes it is an investment. A 20 or 30 year investment. Even if you do move, trade up or down, remember that your value is not just a figure on a piece of paper, assigned by somebody looking for a commission, but is that place where your neighbors wave, hold your packages, and when you walk in your door, know that you are home. 

Don't Panic!