I removed my prior post since it offended someone, so I'm going to repost my response and take better care as to not offend anyone.
If a homeowner wants to move, for whatever reason, the current market conditions should not keep them from doing so. If they are waiting for the equity they lost from putting 20% down in 2005, they may be waiting a very long time - upward of 10+ years - as Forecasters predict. Since you are thinking about selling this year - in 2011, you can expect to lose your 20% investment and possibly more due to a real estate market still in "crises."
I just ran comparables for Holly Hills and the average sale price in Holly Hills is $590k. That is averaging 9 sales in the past 12 months. $501k on the low side and $678k on the high side with a home under contract that's priced at $475k (not factored into the avg sale price). Days on the market for these 9 homes is 63 days which is very good! There is ONE HOME that has been on the market for nearly a year with no price reduction so this one should be thrown out since they are basically a For Sale By Owner and getting no counsel. 6 days on the market is the low side and 129 days on the market is the high side. It's probable that you may have gotten a higher price in 2009 than if you sold today which would have reduced your losses and the point I was trying to make when I posted my first response. Since the values were still on a downward spiral in 2009, that's why I recommended selling NOW - to cut the risk of any losses beyond the $20k you put into the purchase. I wasn't suggesting you walk away from a loan. My fear was that you'd be in a Short Sale situation if you waited longer to sell. And how much sense does it make to pay on a home that's valued at nearly $170k less than you paid? Every person who sells today is helping correct market values and until all homes in our market are aligned properly with their value, we'll continue to have short sales and foreclosures. That's why the government is coming up with so many programs to help homeowners with values less than their mortgage. They are talking about implementing a program where they reduce loan balances although I know banks that have done that already. Here's a link to a good article in this regard: http://www.mortgagelendingnews.com/top-news/11929-government-foreclosure-prevention-shifts-to-reducing-principal
Am I motivated to say "sell now" to hopefully get your listing? No. Although homes are selling quickly in your community, most listings today are difficult to get to a settlement table. There are few buyers and too many options for them which drives prices down even more. This makes for stressed out sellers, agents and anyone else involved in a listing. So, in the grand scheme of things with a massive inventory of homes already on the market, Realtors need buyers to survive in this business.
I receive daily updates on our real estate market from various sources. Buyer confidence is low, interest rates have risen, unemployment is at an all time high... that doesn't paint a very good picture for sellers. Do you stay locked in to your home indefinitely because of our real estate crises and because you may take a loss above and beyond your 20% investment? I say no. But that's just what I'd do personally and how I advise my clients professionally. I saw the downward spiral in values in 2007 so I scrambled to sell my home and sold it in January 2008. If I hadn't sold it then, I'm sure my value would be down another $100k based on today's market.
I always advise my "clients" as if it were my family. Although I do need to make a living, I am one of the most honest and ethical agents in the business. One of my lender partners tells me often that he's never seen such an honest and ethical agent who always looks out for the clients best interests even when it means I earn no paycheck. I have always believed that you reap from the seeds you sow. So I am careful to sow "good" seeds with every client I work with.
Cathy Chapman, Broker
Signature Home Sales, LLC
301-514-6839 Cell... more