According to cnn.com, home prices have dipped another 4.5% in 20 major cities around the United States. Obviously, this continues to leave many home “owners” upside down on their homes and face the potential of foreclosure. Many have opted to dump the properties, either by sale or default—many wonder if this is the solution for them.
Know When to Hold’em
Homeowners may calculate that paying a final price tag that is worth much more than the current market value is too great a cost. Is it really? When the home was purchased, that is what it cost. The “value” of the home is important only if the owner decides to sell it. But increasingly, families are staying put in their homes by necessity since the bubble burst. What this means to that homeowner is that whatever potential resale value is projected remains an unrealized profit, but it also remains an unrealized loss. The homeowner still gets the house.
On the other hand, those with extra capital to invest may find that the state of the market lends itself to incredible deals if one is willing to root them out. As renting becomes more popular, rental property will also become chic again. But buyers beware, investing in rental properties these days will usually lack the 1-2 punch of having renters pay the mortgage and then reselling for significant appreciation.