Like most others we didn’t see it coming…but overnight it seemed our bustling new community of young families quickly evaporated until we were some of the few occupants left. Our friends were getting laid off from their jobs, construction had halted, the economy and home prices were in a free fall. Our investment was becoming worth less and less by the day as all the neighbors defaulted on their loans and entered foreclosure.
We were determined to not foreclose like so many others but watching our $300k home devalue to the point of barely being worth the down payment was scary to say the least. Due to some changes at work we were also in need of moving to a new area. We decided we would rent out the house and purchase a home in the area we wanted to live. We were lucky to find qualified renters but were taking a $1000 loss each month. After 4 months our renters lost their jobs and had to leave. At this point we estimated that our home was probably only worth $150k so we started the short sale process with the bank.
The banks were flooded with short-sales and foreclosures they weren’t ever set up to handle. They didn’t have personnel or processes in order to handle the sheer volume of people defaulting on their homes. In order to go the short-sale route we needed to stop paying the loan and show financial hardship. We were very reluctant, but with the counsel of many we knew that it was time to cut our losses. We spent almost two years trying to short-sale the house before the bank formally foreclosed on the property. In April of 2010, our first home that we had big dreams for went to auction and sold for $105,000. With it, all of our savings gone and credit destroyed for the next seven years.
I was humiliated. I felt like a giant failure. How could I be so stupid? How could I have avoided this huge error? I spent a lot of time internally beating myself up for having this scar on my record. At 23, seven years until I could buy a car or home felt like an eternity. I wasn’t alone though…there were 5.5 million other households who experienced this same loss. Are you one of them? If you’re age 35-45 chances are you may have owned your first home during the 2008 recession and know exactly what I’m talking about. They call us the “Foreclosure Generation.”
The reason I’m sharing this story today is because I think this is important for you to understand that I know first hand how stressful it is to buy a home. Compounding that with those of us that experienced loss during the aftermath of the recession makes buying real estate seem like an unsafe investment. I’m here to tell you it’s not. We just reached the average selling price from pre-bubble and prices will continue to rise. We have a strong job market, one of the highest migration rates in the country and lower than historical average interest rates. Layer those facts in with only 1 of the last 5 recessions resulted in a material decline in home prices.
You might be wondering how I went from one of the worst economic losses in history to now selling real estate as my profession. It’s been a windy road to say the least, but I think this is one of my best qualifications as your REALTOR. I used that experience to fuel better decisions, education and analysis on the next three personal homes I bought and sold, and am now net positive on real estate gains. I use the same level of care and detail in my daily practice to help you achieve the same.
If you’re scared about jumping back into homeownership let’s chat about it. I too have fears about the economy and housing market, but I am well educated and informed to help you make the best decision for your family and finances.
Lindsay Fricks- Helping you and your family LIVE AND LOVE IN AZ!
