The Green Eyed Monster

Today has been a tough day. I just started this blog, and it's actually been making me a tiny bit excited about rediscovering our condo and tackling some projects. I was beginning to think that this experiment could be crazy enough to work, and that writing about my house might make me learn to like it more.

But then I've spent nearly all day hearing a friend' new house. They had the offer accepted finally, after a long short sale process. I'm totally happy for them– they're some of my favorite people. However, it is so hard to hear people talk up their new real estate deals when I'm feeling so desperately underwater on our "investment." Their new house is LESS than ours was, but it's a four bedroom house with a basement, and ours is a two bedroom, one level condo. And it's in our same neighborhood.
That's part of the reason we didn't buy a single family home when we bought – they were completely out of our price range. We could either buy a house in a sketchy neighborhood, or a condo in a good one. We chose the condo. And not to say that was a bad decision at the time… I think it was the right one. But lately all I hear about are the deals people are scoring now. If we had just waited, we could have bought a place twice the size of what we have, with some land. Hindsight is 20/20, but I wish all the time we'd waited.

Do you compare yourself to others? It's a really bad habit that I have. My husband tells me all the time to knock it off, and I know he's right, but it's hard for me to stop. I also worry that people are judging me. Stupid, I know, but it still happens. Basically, I think that my condo appears like a glorified apartment, and that my friends and acquaintances secretly judge me for not buying a "real" home. Any tips for avoiding real estate jealousy? Do I stop torturing myself by looking at listings? (As a real estate junkie, that would be tough. I love to look at both homes I wish I could buy now, and similar condos in my area to see what they're selling for. It's always torturous, but addicting at the same time.) Do I run when someone wants to talk about their new house? Never help my friends move into their new digs? Or do I just suck it up and deal?

If you're underwater, what do you do to cope in this buyer's market?

That Sinking Feeling

The news for the past three years has been rife with homeowners' tales of woe. They usually go a little something like this: a family buys a home with no money down. Gets an adjustable-rate mortgage to avoid paying PMI. Plans to sell the house before the ARM period runs out (usually five years). But the market tanks, and so they can't afford to sell. Then the mortgage adjusts, causing the payments to skyrocket beyond what they can afford. So they stop paying. And then have to walk away. Of course, there are a few things going on now that are preventing this from happening as often – the federal fund rate is low, so when the ARM adjusts, it might actually adjust lower. And there are federal programs in place to try and help people avoid foreclosure, usually by offering grace periods on interest, or extending the mortgage to 40 years.

This won't be a post to talk about how I feel about this – was it the shady mortgage companies, the traders selling mortgage backed securities, or greedy homebuyers buying more than they could afford? For those discussions, I've found www.thehousingbubbleblog.com to be a good source… although a bit of a scary one at times (those people seem to take a great deal of joy in predicting financial Armageddon).

But this is more of a post to talk about where I'm at with all this. And why I have no plans to walk away… even though I currently live in a depreciated asset. First off, we bought it. While I occasionally get bitter about all the advice we were given about how we had to "buy now, or be priced out forever!" we still made the leap, chose the home and entered into a contract. I wouldn't feel right about walking away from my financial obligation. Secondly, while it is not my dream home, there are things I quite like about our little condo. We live in a fabulous neighborhood. It's very walkable, especially for a young family like ours. We live around the block from two well-maintained parks, an elementary school, a pre-school and a gorgeous nature center. We also live close to the main strip with stores and restaurants, and about five minutes drive from downtown. The condo itself is quiet – we are blessed with nice, inoffensive neighbors. And we've put a lot of work into it that I'm proud of. Every time I get the itch to move, I look around at all the things I've put into the condo – the light fixtures, the new washer and dryer, the new floor in the kitchen, and that urge dies down a bit.

Finally, we're just not that bad off, and for that, I am grateful. Our payment is low, and we can afford it. It's never changing; we have a fixed-rate mortgage. And some day, maybe, if we ever do get to move into a single family home, if we have enough equity just from paying down the mortgage, maybe we could break even, or at the very least keep it and rent it out. There's always the chance that we'll continue to pay down the mortgage and the market might creep back up, and we'll be able to meet in the middle and break even. It's just that possibility is likely 5-10 years in the future, when we bought this place with a five year timeline in mind (and are on our fourth year).

So what about you? Are you underwater too? Sticking it out? What are your plans for making the best of your situation?

Welcome to Living Underwater!

Welcome to our blog, Living Underwater: One couple's journey learning to turn their financial mistake into the home of their dreams. Here we will explore a variety of topics - mainly the housing market, home decorating and maintenance and the ins and outs of condo living.

So who are we?

We're basically your average recession story: we bought a condo at the height of the market in 2006, with 0% down. We planned to stay for around five years, but as we're closing in on that time, and our house is worth way less than we paid for it, we're realizing we need to rethink this plan. And, of course, our family has grown in the last year, and we're facing a reality we never really planned on: we might have to raise kids in a two bedroom condo, instead of a single family home with a white picket fence.

And while it can be a hard pill to swallow as we watch our friends buy big houses in our neighborhood for less than what we paid to buy a condo, we know we can make this work. It might take some creative furniture arrangements and space saving solutions, but we can have a beautiful life between these walls. We hope you'll join us!