I purchased my single family home in Fountain Hills, AZ in October 2004; it was the beginning of the residential real estate “frenzy” in Arizona. In 2005, the peak in the market, if I had sold my home I should have been able to sell it for at least $160,000 more than I had paid for it the previous year.
In August 2008 I was considering selling my home. At that time I was looking at making a much smaller profit, approximately $40,000-$50,000 more than I originally purchased the home for in 2004. I could not get my head around the fact that at the height of the market, I would have been able to sell my home for a profit of 3x’s that amount so I decided to stay put and see what direction the market would take.
Fast forward to almost 2 years later, July 2010. I am considering moving again so I ran some preliminary numbers to see where things stand in my area. If I look at ALL types of similar single family home CLOSED sales (not active or pending) including traditional sellers, short sales, and bank owned the expected outcome is not too pretty. Best case scenario is that I would break even after the costs associated with selling; realtor commissions, closing costs, etc. Worst case scenario, I would be taking a loss of approximately $20,000-$30,000.
I do not need to sell, but I would like to move. I am not upside down meaning I do not owe more to the bank than what my home is currently worth. If I decided to sell, I would not be selling “short” since I put a substantial amount down when I purchased my home. The hard reality in my case is that it would be a real loss of my personal money that I have invested in the home, not the banks.
So, I ran the numbers again for similar single family homes that were sold by traditional sellers only, not short sale or bank owned. The outcome was slightly better; best case scenario was breaking even. Worse case scenario was a personal loss of approximately $7k-$20k.
I have decided to stay put for now. I plan on re-evaluating the direction of the market again in 6 months and let you know how it looks then.
