Out of 3,000 appallingly self-indulgent posts, this ranks #1

[muckefuck]

As some of you may know, my old condo had been on the market for just under a year before I closed on it yesterday. There are a couple reasons why I haven't written more about the whole experience. The first is a certain superstitious aversion to jinxing things. Particularly once it was under contract, I didn't want to say anything lest it fall through and I feel miserable for having gotten my hopes up.

The second reason is that it's been a dulling lesson in progressive disappointment. My original asking price was $164,500, which I arrived at this by feeding my 2003 purchase price of $139,000 into a couple of inflation calculators and then tacking on a few thousand for time and trouble. My realtor was happy with it because it was still below the comps in the building. But after weeks of no activity, we began a series of strategically dropping the price to stir interest. Eventually, it came all the way down to $119,000 and I closed for $115,00.

I'm still in a state of denial about the loss. I selected my place very carefully so that it would be both an excellent home and a safe investment. It's in a spectacularly well-run building in a beautiful location. More important--given that I knew at the time the market was inflated--it was a lower-end property: a one-bedroom perfect for first-time buyers. I reasoned that, when bubble burst, it would be those at the upper end who were hit hardest and seeking to downsize. At the same time, first-time buyers would still be entering the market, so a place like mine was sure to hold its value, right?

Well, perhaps--if there hadn't been, you know, a credit crunch which made it all but impossible for first-time buyers to get credit. In the end, I was just as blindsided by developments as the irrationally exuberant flippers I was laughing up my sleeve at. It's been a tremendous blow to my ego; I feel, quite simply, like a failure. $50,000 in capital, up in smoke, like it never even existed. That averages out to $10,000 out the window for every year I lived there. For that kind of money, I could simply have rented a place twice the size with every amenity imaginable and had it professionally cleaned twice a month.

And this brings us to the third reason why I haven't been posting, which is as painful as a loss like that is, it hasn't cleaned me out. At a time when a significant number of people on my flist and in my personal life are un- or underemployed, I have a secure job with excellent benefits. I still have money in the bank and an IRA. Most importantly, I have monshu, who promised me I wouldn't suffer for having been forced to sell when I did and he has made good on that promise. I really don't deserve anyone's sympathy and wouldn't be comfortable receiving it anyway.

So this puts me in an awkward position whenever I have to tell someone I sold my place, since the first word out of their mouth is, "Congratulations!" It's hard to explain that I don't really feel like celebrating without sounding like a big whinerbaby. I really liked that place; together with a host of friends, I put a lot into that place. It was my first opportunity to turn a habitation into the place that I really wanted and I ran with it. Now not only is it gone before its full potential was realised, but I'm out the funds I expected to have to make this place into the home I've dreamt of.

Again, don't feel bad for me; every night I get to hear the snores of my beloved, and that's something priceless that I've wanted for over a decade. I haven't slipped out of the middle class, like those forced to walk away from huge mortgages they couldn't every hope to repay have. In fact, I didn't even have to take money to the closing. I know I'll be a better person for the whole experience once I'm finally able to come to grips with it. (As I bitched to the Old Man, "Why does personal growth have to be so expensive?") It's only in my mind that I've been prevented from doing anything I really want to do, since people far worse off have done a lot more with less.

*BIG SIGH*

Now with that out of the way, it's time for more posts about peonies and bunnies and borage salads.

Comments

[snousle.livejournal.com]

$50,000 in capital, up in smoke, like it never even existed.

If it's any consolation, the psychological aspect of this slump is so overwhelming that even though we sold our house just past the peak, I go look at it's current value and still feel the loss even though I'm not the one dealing with it.

I've made vastly larger financial errors than this. Mistakes larger than my current net worth. I've also avoided mistakes of the same magnitude. It's like the weather, and every bit as impersonal. You never know if it's going to rain on your picnic.

So don't worry, I don't feel bad for you at ALL. ;-)

[cruiser.livejournal.com]

I've made vastly larger financial errors than this. Mistakes larger than my current net worth.

I remember an investment seminar that a friend of mine & I went to (mostly for the free food). At one point, the guy at the front of the room was saying something to the effect of "If you don't take advantage of this opportunity RIGHT NOW it will be a $[big number which I don't remember the exact size of] mistake. You can't afford to make a $X mistake."

Afterwards, feeling the need to be social and point out the error of his ways, I commented to the speaker that it's impossible to avoid making financial mistakes of that size. When Microsoft, Walmart and Berkshire Hathaway were small and low priced, not investing in them was a mistake of that size - which I made every day. And thanks to the magic of compounding, little mistakes I made when I was 20 are huge now.

[snousle.livejournal.com]

Exactly. I was a little more explicit about the Microsoft thing, having sat down with (at the time) a new Microsoft employee and talking about his stock options. I mentioned that I thought they were once a good investment but that the party was probably over... LOL was I ever wrong! I also sold options I had in a biotech company I worked for at $50 and felt smug when they dropped to $35, until the bubble hit and they went to $300. So I felt bad about that, until a friend held those very same stocks through the whole bubble and they ended up completely worthless.

These are not "mistakes" in the sense of bad judgment, just bad luck!

[muckefuck.livejournal.com]

So don't worry, I don't feel bad for you at ALL.

Nothing you could say could've cheered me up more!

[nibadi.livejournal.com]

Ich habe sicherlich in den letzten 10 Jahren ca. 50 000 € mit Aktienverlusten in den Sand gesetzt und wohne dummerweise nach wie vor zur Miete ... und ich befürchte, dass ich nie Immobilien besitzen werde. Es sei denn, ich entscheide in 15 Jahren, dass ich mir ein Häuschen auf der von mir geliebten Insel Bali kaufe. Aber ob ich dann noch den Mut aufbringen werde.

Ich bin manchmal selbst erstaunt, mit welcher Gelassenheit ich die Verluste in den letzten Jahren hingenommen habe.

Immerhin lebst du jetzt deinen Traum mit Traummann an deiner Seite. Also insofern dann trotz allem: Gratulation.

[cpratt.livejournal.com]

I'm having trouble with the math. $139k - $115k = $24k. That's about a year's rent for a 2 bedroom apartment in California. And you were there for, what, six years? Even if you add $10k in expenses to sell the place, you're looking at about $475 a month to have lived there for six years. Are there really apartments in Chicago that include professional cleaning for $475 a month? I mean, hell, you're not gonna get shit in San Diego for less than $1,200 a month (not including cleaning) and we're not even a real city.

Sounds like you made out OK, to be honest with you.

[lhn.livejournal.com]

Though add the interest paid on the mortgage, condo assessment, property taxes, and any maintenance that would normally be covered by the landlord to get a direct comparison with rent. While I can't speak directly to this situation, for the last few years rents have generally lagged property values even before the crash.

[foodpoisoningsf.livejournal.com]

You didn't lose 50K. That's the profit you wanted.

You had a 50K disappointment. Congratulations on having sold the place at all- the outcome could have been much worse. There's another LJer who sold his house for less than his outstanding mortgage "it's worth much more!" except that real estate is only worth what someone will pay for it.

[muckefuck.livejournal.com]

Call it a $26,000 loss, then; that's what the IRS will. This is different from snousle's paper loss in that that's money I actually had in cash that was plowed into an asset which then sold for less. If that's not the definition of a "loss", then I admit I don't know what is.

real estate is only worth what someone will pay for it

You could say the same about anything, couldn't you?

[muckefuck.livejournal.com]

During the six years I lived there (and the seventh in which it was vacant), I was paying about $1060/month towards the mortgage (most of which was interest, of course) and assessments. That alone could get you a fabulous one-bedroom or decent two-bedroom in that neighbourhood. Professional cleaning on our four-bedroom is currently something like $180/month.

Keep in mind that outside of Chicago, there's nothing but aadroma and cornfields, so we don't have the same kind of land-use issues as San Diego. There are no fire-prone canyons, no slopes too steep to build on, no shortage of water anywhere. Land prices and rents reflect that.

[sconstant.livejournal.com]

I will disregard all the financial stuff (except to say that unless things were greatly odd in your market, you did lose less by having a smaller apartment to take that loss on) and congratulate you on not having to worry about this lump of real property thing which is no longer where you live but which you have to attend to and worry about and has-lightning-hit-it-while-I-slept, etc., and which now you don't have to worry about.

When we moved from house #1 to house #2 we didn't sell house #1 for about 10 months. We were taking a calculated risk because we knew there was a specific time of year (when newly minted doctors match into hospitals, there was one nearby) when it might sell without us dramatically dropping the price, so we hung on paying the mortage, etc., and it did sell then. But those 10 months of going to flush the toilets and keep things "show"-able, making sure there was nothing horribly wrong in our absence, the logistics of two sets of utilities, etc. was an additional pain (additional to the two mortgage checks every month). So, again, disregarding the pain-in-chief of price and loss and etc., I'll congratulate you on being free of the fuss and bother of attending to it.

And amen on the feeling lucky in the midst of this shitstorm.

[muckefuck.livejournal.com]

That was e.'s take on it. She knows that these things weigh on a person even when they're not aware of it, and urged me to take the offer even if it wasn't anything to get excited about. I also took a calculated risk by keeping it over the winter and putting it back on the following spring, and one that didn't particularly pay off. I could've offset the loss by renting it out short term, but (a) getting the tenants out in time to short showing it again could've been a huge hassle and (b) everything you say about has-lightning-hit-it-while-I-slept-type worries is like times ten when you've got near-strangers living there. I considered renting it out longer term while waiting for the market to recover, but rents are so depressed it would've been a steady drain and I knew I didn't have the psychic fortitude to be a landlord.

[febrile.livejournal.com]

Where the subject is lost money, I win.

Which is to say, it could be worse, and count your blessings dearly.

[muckefuck.livejournal.com]

Don't I know it! Every day I thank the stars I've paid off my educational debts and haven't been fool enough to run up new ones. (No offence, Mr Had-To-Have-a-Law-Degree.)

[febrile.livejournal.com]

Heh. None taken, Mr. ...

(okay, fine, mr. smarter-than-me.)

[muckefuck.livejournal.com]

Smarter or merely less daring?

Res Ipsa Loquitur

[febrile.livejournal.com]

Smarter. Trust me on this one.

[innerdoggie.livejournal.com]

Although I am one of your unemployed friends, I am very sympathetic. I hate losing money like that, too. So hugs!

I'm very glad things aren't worse, and you (and I) are still middle class. Wish me luck finding a job before COBRA runs out so that I can stay middle class.

[muckefuck.livejournal.com]

I think about you and your job hunt all the time. There but for the grace of god...

[keyne.livejournal.com]

I hear you. We didn't lose a huge amount, even on paper, by selling our house for $X last June -- but a year earlier we'd been hoping for 130% of $X. Now we have a hefty mortgage on the new house and there's nothing left over for retirement or the kids' education funds, both of which hurt.

[gorkabear.livejournal.com]

I'm starting to think that buying isn't very smart. But renting isn't either. The more I do the math, the more I think that both things are overpriced.

I'm sorry for that loss... 26k is a lot of money

[zompist.livejournal.com]

This sort of thing hits right in the middle class values. Real estate is supposed to be the most responsible of investments! We had to sell our house in Boston at a loss– no fun at all.

But your expenses have just gone down $1000 a month, no? That's a nice thing these days... ah wait, you have to stimulate the economy; please find something else to spend it on...

[muckefuck.livejournal.com]

$1000/mo. is roughly my half of the mortgage on the new place. monshu was floating me until I sold my place, and I was supposed to pay him back out of the difference. Now that's going to have to come out of my income, so so much for stimulation for a while...