If you are in a neighborhood you think is going to keep falling in value, do you sell when the current market will payoff current mortgage (Lose money overall but don't owe anything either) or do you stick it out and "hope" it rebounds? But then you stand the risk of market continuing to fall and you end up selling for far less later on?

I know there is a 50% chance of one or the other happening but wanted to get a feel for what Texags would do in this situation.

To give a rough idea of what is happening, we were one of the first to build in this subdivision. Turns out the builders are finding it harder to sale at the rates we bought at so they are lowering their prices causing the "appraisals" to fall. We are also in the 400-600k range. Lesson learned is you don't want to be one of the first to build even though you get the pick of the litter when it comes to lots which is what we fell for.

How far along are they to closing out the subdivision?

We want more acreage. We are on one of the largest corner lots and it still isn't enough for us now that we are seeing where our neighbors are actually located. Seemed like a lot more space when looking at plot plans.

We have lived here for 2.5 years and they just opened another section so it will probably be 2-5 more years before closing out.

We would really like to get out sooner rather than later but it really ins't a necessity.

Prices should go up when it's finished, if it's desirable.

The first homes in my half of neighborhood (first half was built 5 years earlier) were high $200s low $300s. Now 5 years later they are all high $400s and low $500s since build out 1.5 years ago. It's just gone up and up. People want to live here, but there are fewer and fewer new home options.

Olag00 said:

---

We want more acreage. We are on one of the largest corner lots and it still isn't enough for us now that we are seeing where our neighbors are actually located. Seemed like a lot more space when looking at plot plans.

We have lived here for 2.5 years and they just opened another section so it will probably be 2-5 more years before closing out.

We would really like to get out sooner rather than later but it really ins't a necessity.

---

If it's going to be built out that quickly, it's probably not in a master-planned community. Why are the builders having trouble selling lots? What's the surrounding area like? What are other neighborhoods around you doing? Are there older neighborhoods around you? What price point are homes in neighborhoods around you? What's the economy like where you are? A lot of moving parts and questions.

It's not a master planned community, just a gated community of higher end homes around the Tomball area. Unfortunately the areas around are anywhere from 80-220k. I am wondering if the builders/developers thought the area would go for a certain price but that reality isn't happening causing the builders to lower their price point. I have seen people trying to sell their personal home for over a year and they keep dropping their prices to well below even the low end of the new builds. They recently went off market to give it a break I presume.

I have a realtor coming by tomorrow and she forwarded a CMA report this afternoon. There are listings of builders accepting an offer 60k less than the list and that seems crazy a builder would stoop to that low of an offer. Average days on the market are 251 with 61 being the lowest and 427 being the longest!!!

Since I am in no real hurry I have thought about FSBO just to try and save a few bucks to not go into the red.

Olag00 said:

---

It's not a master planned community, just a gated community of higher end homes around the Tomball area. Unfortunately the areas around are anywhere from 80-220k. I am wondering if the builders/developers thought the area would go for a certain price but that reality isn't happening causing the builders to lower their price point. I have seen people trying to sell their personal home for over a year and they keep dropping their prices to well below even the low end of the new builds. They recently went off market to give it a break I presume.

I have a realtor coming by tomorrow and she forwarded a CMA report this afternoon. There are listings of builders accepting an offer 60k less than the list and that seems crazy a builder would stoop to that low of an offer. Average days on the market are 251 with 61 being the lowest and 427 being the longest!!!

Since I am in no real hurry I have thought about FSBO just to try and save a few bucks to not go into the red.

---

Hmmm. I would need to know the specific neighborhood in Tomball to help further. Sounds like you're covered with an agent's opinion. If you need more help or another opinion after meeting with that agent, let me know and I would be happy to help all I can. Builders can inflate prices too so it appears they are taking a big reduction and that will hurt the resale market.

It's hard to predict what the future holds.

My last house, I thought I bought it during a dip in values. I got it for about 15K less than what the floor plan sold for in the last 6-12 months. The value then dropped a little and remained flat for about 6 years. After those 6 years, it jumped about 20-30% (total) over the next two years.

I sold thinking I should get out a winner after that big jump. The market has since increased about 10-15% over the last 2 years.

If you can predict the Houston economy over the next 5-10 years, that will tell you what you need to do.

Can you rent it out for your carry costs and move to your desired place?

That's not the right rent market you want. And high end renters want shorter leases.

OP I'd sell IF, I repeat, IF you find the new home you really really want. Then the losses on the sell is made up on the buy.

Good luck.

I dont think we could handle both payments and I wouldn't want to risk not finding a tenant quick enough.

Steve, could you explain how I could make it up on the buy of the next house? I have always been under the impression you try and sell your current home and take the "profit" and put towards your next home. Since we wont have any profit, we will essentially be starting back at zero regarding the down payment since we put down almost 50k into this house and we wont see any of that back at time of sell. We planned on renting for a year or two to build down payment back up for next one.

nm...

I would assume the neighborhood was built for Exxon people that didnt come. Given price point you are going to have significant pressure from cheaper opitions in the region and a lot of land around you.

How much lower are builders asking than what you paid?

I think if people actually buy a home and pick the options the homes would be selling for more however the builders are doing "inventory" homes to fill the lots and they are selling them for the base price even though there are some upgraded options included. I think this is where it is hurting us. We had quite a few upgrades installed and we will probably have to realize we are not going to get 100% back on them similar to adding a pool. Luckily we haven't done that but thought about it when we originally moved in.

If you can wait it out might be better off waiting until the subdivision is finished and the Houston economy starts to rebound some. The oil dip still has not picked back up much in Houston. Lots of folks still looking for work.

The oil dip will not pick up for a while. Companies are going to run lean.

sounds like you may have bought at the oil high and now it's bust.

I assume the much farther suburbs in Houston are hurting right now. They were throwing up $500k homes and oil money was flowing like keystone at a frat party. Now that its dried up, people are bunkering and waiting it out or straight up liquidating. Looks to me like the builder is liquidating.

Also - i'm not an expert but i wouldn't ever expect to get money for a pool unless you had a resort style, wolf of walstreet pool with a poolhouse on a 2 acre lot.

We are saying the same thing regarding the pool, I wouldn't expect to get 100% back on a pool either and that is what I am referring to on the upgrades we did. We are not going to get 100% back on the choices we made, however, our upgrades will help when compared to "inventory" homes from builders and help sell ours (hopefully).

Thanks for all the insight and responses. After doing some pro's and con's on the selling vs staying, we decided to go ahead and list. If it sales so be it, if it doesn't we will ride it out for a few years. It should go on the market next week.

Olag00 said:

---

We are saying the same thing regarding the pool, I wouldn't expect to get 100% back on a pool either and that is what I am referring to on the upgrades we did. We are not going to get 100% back on the choices we made, however, our upgrades will help when compared to "inventory" homes from builders and help sell ours (hopefully).

Thanks for all the insight and responses. After doing some pro's and con's on the selling vs staying, we decided to go ahead and list. If it sales so be it, if it doesn't we will ride it out for a few years. It should go on the market next week.

---

I agree with your strategy. What can it hurt?
No bites, sit tight. A few years will pass quickly, and you may make some buds among the newbees, who knows? At least you'll know you tested the market. The unknown is what usually costs me sleep.
Then again, it might sell.

The 249 extention might help your region down the line(?) ...don't really know your area well....

if you do take it down, wait a while to put it back up. Buyer's agents will think something's up if it doesn't sell or think you're overly motivated to sell.

If it were me I would get an appraisal now so you know what the comps look like, showing a house sucks, getting an offer that won't close sucks worse.

I thought about getting an appraisal but we are listing actually in the lower end of realtors suggestion to avoid that chance. She came by yesterday and doesnt see a reason to be concerned with appraisal.

With a good realtor I agree no need for an appraisal

Realtors, mortgage brokers or buyers don't set prices, appraisers do.

hellodarlin said:

---

Realtors, mortgage brokers or buyers don't set prices, appraisers do.

---

If you have the money to buy a house, you can pay any price you can get the seller to accept. You don't even have to get an appraisal. If you need to borrow someone else's money, then they will want to make sure their loan is secure.

OP,
Interest rates and appraisal values (taxes) are still in your favor. If you find the next house you want, consider moving now. Otherwise, hunker down and learn a valuable life lesson - it's not good to depend on your primary residence as a good investment.

Sounds like you bit off a little more than you could chew. Your rent option is a non-starter - you won't get enough for it, and you need to be more liquid to be a low-stress landlord, imo.

Have you considered an older home with good "bones?" Maybe you could get it on the cheap, and do upgrades as the property value rises. You'll also have a nice HUD statement to show HCAD.

94chem said:

---

OP,
Interest rates and appraisal values (taxes) are still in your favor. If you find the next house you want, consider moving now. Otherwise, hunker down and learn a valuable life lesson - it's not good to depend on your primary residence as a good investment.

Sounds like you bit off a little more than you could chew . Your rent option is a non-starter - you won't get enough for it, and you need to be more liquid to be a low-stress landlord, imo.

Have you considered an older home with good "bones?" Maybe you could get it on the cheap, and do upgrades as the property value rises. You'll also have a nice HUD statement to show HCAD.

---

Not sure where this is coming from. We didn't build this home to be an investment property, it was supposed to be our "last" home for a while however the neighborhood hasn't turned out like we expected. I am not moving to "make money" or because I can't make the payment on the house, it is to get out of the neighborhood. As mentioned before, if it doesn't sell in 4 months (our current listing agreement) then we are going to deal with it and sit tight for a few years and let the builders get out.

Renting this house was never going to be an option. We would lease our next residence (if this house sells) to build up a down payment and purchase a larger lot to build on.

After building our previous 2 houses in past 5 years we can't see ourselves living in an already built house due to all the customization's we have become accustomed to.

Our first build we sold after 2 years due to a job relocation but we profited almost 60k in that sell but unfortunately the market isn't going to allow that for this house.

We have photos tomorrow and the listing will go live later this week.

hellodarlin said:

---

Realtors, mortgage brokers or buyers don't set prices, appraisers do.

---

Buyers with cash do too.

Quote:

---

After building our previous 2 houses in past 5 years we can't see ourselves living in an already built house due to all the customization's we have become accustomed to.

---

Let's follow this logic. You are saying that you build your home/s exactly how you want them. Then, you are upset that the market doesn't give you exactly what you think it's worth? Why should you expect that? You built it for YOU, not the next owner. On the other hand, perhaps your customizations aren't as unique as you make them out to be. After all, you're dealing with a builder in a subdivision. In that case, you may want to reconsider homes in more established neighborhoods. I'm 44, and I still don't know exactly what I want in a home. For example, I love island kitchens as much as the next person, but I gave it up when I got a 1+ acre wooded lot.

I learned last year that it costs the same amount to update a 40 year old home as a 20 year old home. Out of date is out of date.

Also, apologies for word choice on previous post. I mean that if you are unable to absorb several months of double mortgage payments in order to execute a desired move, you should consider accumulating more cash on hand. You'll get to deduct the taxes & interest, and you'll get a chunk out of your current escrow back once you move. Momentary liquidity concerns should not be the deciding factor in a such a big decision.

I'm not sure anywhere in my posts I stated I am "upset" about the market not giving me what I want for the house. This thread was started just to get the opinions of others on if they would sell knowing they would take a loss just to get out of a certain neighborhood. I welcomed all opinions to see if there was something I was missing and I wouldn't base my sell/no sell on "discussion" forum responses.

I'm not that upset about the market not giving me what I would like for the house. We put in over 120k of upgrades into this house so that is pretty customized (semi custom is the term they throw around) and there are actual custom builders in this neighborhood (Drees & J Patrick) so it isn't a "tract" builder subdivision like most subdivisions. If you have ever been into a model home for the builders, you know they upgrade almost everything, well during the build and after, they called our house Model #2 due to the upgrades. This is why I say we should be thinking of the upgrades similar to putting in a pool, no one gets the full price back. I am at peace with the market not giving me my full 120k back on the house, they shouldn't have to pay for "my" upgrades. It would be nice, but not reality.

I have been through the double mortgage before so that is why I am against having the double mortgage and if I knew it would be "a couple of months" there wouldn't be a problem. But there are houses for sale by current owners that have been sitting for over a year and that will eat into anyone's contingencies.

Hopefully this posts gets my mind set portrayed correctly. I appreciate the candid responses but it seemed some things in my posts were not conveyed correctly and maybe this one will help.

Yes, that's tough if the double mortgage stretches more than a few months. Good luck with your sale. I think values in your price range have dropped 5% in the last few months where I live...