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Bill Greenwood
07-08-2013, 09:06 AM
There is some good news on the economic and money front. Better conditions should eventually lead to a pickup in general aviation, if we, they, have more money there's more to spend on airplanes. Or in my case if I spent less on airplanes, I'd have more money, but less enjoyment.

There was some recent good news re unemployment figures; certainly not back to normal, but a small step in the right direction.
Today, Monday there is pretty major improvement in "underwater" mortgages. And no, this doesn't have anything to do with submarines.
"Underwater" means that your home value on the market is less than the amount that is owed on the house. Not a good thing; and it often came because people got mortgages with very little equity, only 5% down or even no a down payment, and then the recession in the economy and the drastic fall in property prices, especially in some parts of the country, left the market value less than the loan value. If one was already having trouble making payments, perhaps due to job layoffs or cutbacks, it is therefore even harder to struggle to keep your home out of foreclosure if the result is that you can't pay the loan even if the house was sold.
Not good for anyone, and contrary to what many of us have come to expect in our lives that one of the long term advanatges of real estate and home ownership was that there was appreciation in the price of the home.

I don't have exact figures, but in several of the markets hardest hit like Las Vegas and Florida, there is a 50% drop in the number of mortgages that are "underwater".
I haven;t seen details of why this is; could be some homes have already been foreclosed on, or refinanced, or better yet that the improvement it due to the rise in market prices for homes in those areas, and the weakest ones are up 20% or so.
And mortgage rates have just gone up about a half point, but are still at historic lows.

I wonder if any of you folks are starting to see improvement in your area or in your own financial situations? Not many things better than finding a few more bucks to throw away, oops, I mean invest, in aviation!

rleffler
07-09-2013, 07:05 AM
Since I'm in the process of selling my existing home and buying a new one, I can add some comments about the central Ohio area.

It's still about location. I'm currently leaving an upscale suburb, with probably the top school district in the area. It also has extremely high property taxes to fund the quality of education and city provided services folks demand. I've lived in the house for seventeen years and ended up with about a fifty percent appreciation over our purchase price. At the top of the market about five years ago, we would have been able to get another ten percent return on our advancement. We sold the home in ten days.

Since both of kids are in college, we decided to move further out to reduce our tax payments, down size, and move closer to the airport. We were able to meet all the goals. Although I wish there was an airpark in the area. THe house we are purchasing is about seven years old and built by the current owners. They sold the house for $10k less than their purchase price, plus the investments the put into the house for a large deck, finished basement, and wood flooring. I'm estimating that they took about a $30k loss overall. The house was on the market about six months. This isn't an isolated situation. There are three subdivisions that were all new builds in the 2003-2008 timeframe. All the houses for sale in these neighborhoods are all going through similiar short sell issues. I think it is most likely due to builders getting top dollar before the economy crashed and folks overpaid for what the houses were really worth.

I should add that both areas are in nice parts of town. One area is a little more desired is selling like hot cakes, whereas the remainder of the metropolitan area hasn't rebounded yet. The good news for me, is that due to a smaller mortgage, paying half the property taxes, it freed about about $10k. I now know how I'm going to pay for fuel, espcially the fuel needed to fly Phase I quickly.