They were frugal and waited for home prices to fall. They bought a foreclosure- and now they are feeling guilty about it: [Hat tip Mr. Twist]
LAS VEGAS — Right about now, Anya Sanko should be enjoying the thrill of being a first-time home buyer. She bided her time, saved her money and jumped into the market in time to snap up a 1,785-square-foot home with a pool for $143,000.
Yet Sanko, 37, is having a hard time celebrating. Her parents lost their house in Michigan to foreclosure after her father lost his job, her sister’s home equity has evaporated and friends struggling with mortgages don’t want to hear it.
And then there’s that slab in the backyard of the foreclosed house she bought. The previous owners and their children had scrawled their names in it when the concrete was poured, back in 2005 when they bought it for $287,500 amid the Vegas housing boom.
"I think about them all the time," says Sanko, who works for the city of Las Vegas. "I see the names in that concrete slab, sometimes I get their mail, I see all the work they put into this house.
"It’s sad that they never got the reward from all of that work."
This sentiment — call it economic survivor guilt — is a little-noticed emotional byproduct of the financial devastation wrought by the housing and banking meltdowns of the past year. Sanko was always frugal, has a stable job and bought within her means, and yet there’s a lingering sense, as she puts it, that "you’re capitalizing off of somebody else’s misfortune."
So what do Doomers think? Anyone else feeling guilty, or just smarter and/or luckier than the last guy?
You needn’t limit your thoughts to foreclosure guilt. This is an open thread, so let us know what’s on your mind.
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Well,
Around here (Orange County), there were so few that didn’t strangle their properties for every last red cent during the housing bubble; extracting hundreds of thousands of dollars to flaunt their way through life with Aston Martins and S-class Benzes, lavish vacations, and time shares in exotic locations. When I buy a property, I’ll feel sad only for the kids of such hedonists. While I no longer have schadenfreude, I can nevertheless not feel sorry for anyone who loses their house now. The state of California gave everyone a lottery ticket from 2003 to 2008. What’s there to feel sorry about?
Chuck
Chuck -
It’s not like they weren’t warned
“That Hissing Sound”, by Paul Krugman, , August 8, 2005.
Yep, Igor, “undone” is about right.
To look back, and think a home that was valued at 300k is really only worth 150k, it does not add up.
This does though.
It’s everyone for themselves.
Someone will have to buy those houses eventually!
They shouldn’t feel guilty for bad economic decisions made by others. They should just try to avoid making the same bad decisions themselves.
Feel Guilty. I think NOT!
All through that craziness I watched my friends and neighbors go nuts with their houses and that’s no bull. It was the classic story over and over again. Trips here, trips there. Cars. Home Improvements. You name it, somebody I knew was taking money out of their houses to buy it. Even my daughter and he family tried to get in on the housing ladder. She, along with a very willing mortgage broker thought she’s be able to buy a house, put some money in it and flip it for a huge gain. NOT! They were foreclosed on after the ARM they has exploded.
Did I take any money out of my house. Yup. I wanted to buy a piece of property for my and my wife to move to in the future. We took out a fixed rate load from Ditech at about 7%. As I was talking with Ditech they tried like the dickens to get me to take more money since my wife and I had so much equity built up. I wouldn’t hear it. Did we buy a new car? Yup. The old fashioned way. We financed it through GMAC at 5%. The car was under $14,000 so the payments weren’t much. Under $300 a month. We just made the last mayment today.
So in March of ’06 we decided to make our move on our equity heavy home. The RE prices where we were were starting to stagnate. The RE prices where we wanted to move to were still appreciating but not at a huge rate. The prices here never did take that huge jump like they did in so many places. But the price appreciation is steady, year after year 4, 5 and 6 percent.
So we cashed out, moved down here and found a home we liked. We paid cash for the new home and as such only have to pay the property taxes to keep it. Since the taxes here are 25% ofwhat they were there it’s not big of a deal.
Anyway… We don’t feel a stitch of guilt. The nice girl and her family that bought our old house (see above) ended up loosing it. It’s never been thrown in our faces either.
That economic survivor shouldn’t feel guilty at all. She won’t survive for long.
Frankly, I do not think that half off 2005 Vegas prices is a sufficient discount, especially in an area that requires bars on every window. Anya should not feel guilty, but may face her own knife-catching regrets.
I long suspected that when prices dropped in many Phoenix suburbs to acceptable levels that rampant landlording of SFHs would lead to problems when combined with the overall economic decline that was sure to accompany the housing bust. This has not fully played out, but standards have certainly diminished in terms of the rental house occupants in my immediate area.
Of course, I have rented since the end of ’05 myself. I plan to look at single family houses again after the tax credit expires and the speculators have moved on. I refuse to compete for the honor of owning something that is still rapidly declining on a $/sq ft basis.
As far as guilt about underwater family, I led by example and explained the housing bubble in gentle terms once my sale was wrapped up in late ’05. Every single one of my PHX cousins could have sold and pocketed six figures (or close to that amount). One did because he was a single, part-time dad living in a 2003-built, 4,000 sq ft speculative behemoth. He easily made three times his annual salary, tax-free on the sale. And, of course, plunked a big chunk down on another house (to be fair, it was half the size and lower cost). I remember him explaining on Christmas Day 2006 how his realtor buddy was buying up several new houses because the 10% builder commissions made the deals great. The damage (buying the second house) was already done, so I did not make the obvious comment that there is a reason that builders had to offer tremendous commissions to agents in ’06.
But now my cousin is underwater by approximately an amount equal to his bubble gains. If he walks away, he loses only his 20% down. But the credit hit could effect his job. I would feel sorry for him if he had not encouraged his sister and others to make similar speculative purchases. Despite my never having uttered the words (or sentiment) “I told you so,” I rarely hear from him anymore. I have been helping his sister seek a loan modification and will guide her through the foreclosure process if it comes to that.
In the end, she’s not really capitalizing off someone elses misfortune, she just bought a fair priced home. The last family is most likely better off now, they never really owned the home in the first place, they were just duped. With the bailouts, we are all sharing the misfortune.
Oh,,,booh..hooh.
Send all (or most ) of your money to me and get rid of all that “guilt.
GIVE ME A F…ing break
Well, she’s talking as if this is over. Over? I think not. I’ll call it over when I can sleep at night knowing I don’t have to worry about fiat paper losing massive value or becoming worthless. It ain’t over.
5,000 metric tons of gold “compounds” have left US soil
Interesting, isn’t it.
And interesting times we live in.
Cheers!
I suppose if one felt really guilty you could check the Recorders Office, find the NOD and mail the folks a check- but I’ll bet you the people that feel THAT guilty are few and far between.
I think if I were a foreclosed on former homeowner, I’d rather drive by and see someone caring for the old place rather than seeing it boarded up and neglected.
I’ve been planning on buying either a foreclosure or a home that the former owners are losing money on for years, so guilt isn’t going to haunt me. I’d feel a lot worse about overpaying for a property.
Igor is sad, but he’ll get over it.
New economic rule:
If you bought a foreclosed property, you overpaid.
Love,
Herbert Hoover
This is a great opportunity for cash-rich buyers who are the main beneficiaries of this financial crisis. They can take advantage of the weak dollar value and buy properties in busy cities and centrally located areas.
On the other hand,With the rise in unemployment rates and inability of the helpless borrowers to repay the loans, eviction from houses has become very common as the rate of foreclosure is on a constant rise. Late repayments have also been a notable observation as the wages of the employees has been hugely disturbing.
The demands of the unemployment insurance initiatives run by the state, which is financed by the taxes that are paid by the working class has been on the rise whereas the funds being accumulated in the corpus is deteriorating at a rapid pace due to the huge layoffs, shrinking of business and also shutdown of various industries.
Only when the restructuring gets stable and the pricing reconciles and reaches an acceptable and affordable level, the industry is expected to recover. With the housing market in great trouble, moderately-priced apartments have become the core buy.
Read More: http://www.housingnewslive.com
I am not feeling the least bit guilty and I don\’t feel bad for admitting that either. Last fall I bought a bank foreclosure. The previous owners purchased this home in 2005 for an insane amount of money and then three years later walked away because they were upside down and unable to maintain a life style that some lender told them they could afford (and of which they bought into). I purchased this home at a great price, in an even greater location, put in some sweat equity inside and out I just sold the home for $50,000 more than I paid for it after living there for 10 months. I am again purchasing another bank foreclosure and will be doing the same thing all over again. Do I feel guilty. Absolutely not. I have worked hard for the last 50 years, saved money, did not over extend my credit even when everyone around me told me to. So many people that I know sold their homes during the peak but also bought during that same peak and are now upside and will never recover what they have lost. I also know just as many people who have lived in their homes for 25 – 30 years, who have paid off their mortgages and who don\’t feel the need to buy bigger and better and keep up with the Jones. So why should anyone feel guilty about buying a foreclosed home. It is what it is.
Sometimes I do feel protective, no so much guilty. I did cash out some real estate in CA between the end of ’05 and mid-’06, believing things felt like 1989 all over again and I didn’t want to go through another recession with out-of-control expenses.
I loved my property and wish I still had it but the mortgages were too high to make sense.
My CA friends have been struggling, my husband lost a major wad in the stock market, while I sit on the sidelines and view it all as if it were a play. I never said boo to anyone, never let on to why I cashed out. Nobody knows how much I have and it doesn’t matter.
My friends can’t afford to travel to New York for a martini anymore so I don’t either. My husband watches his money now so I lay low too. My new friends in Las Vegas have come here for work and they’re on strict budgets so I am too.
I can afford to travel back and forth between Vegas and CA but my friends are all working so what’s the point.
It just doesn’t matter. At this point, I give away a lot to other people. Mostly friends who are teetering and aren’t too proud to take anything, anything. The homeless situation here in Vegas is huge and growing. I give them money and so does my husband. The hopelessness – i.e., drugs, among the youth is rampant; there’s no place for them to sleep in jail except hallways. They meet more powerful contacts in jail and upon release are in that world a little deeper.
The jobless situation here will take a profound leap the second quarter of ’10 due to the construction projects on The Strip being completed, with no projects on the board after that, none.
I think about buying real estate but it’s not time. The banks are warehousing the foreclosures in hopes of another taxpayer bailout. This one will be huge. When the taxpayer is finally choked to death, the prices will fall, farther than one can believe.
Then it’s time.