Let me try to answer a couple of your questions:
Q: Will the values go up? Will we end up like Japan where once it went down, it never goes back up for abt 20 yrs now?
A: Our preliminary estimates show a return to parity in approximately 2014. Obviously this is a guess based upon the current data, however, itâ€™s the number Iâ€™m using for myself. In some places in the Bay Area, the market (especially the bottom) is actually currently rebounding â€“ it really depends on exactly where you are. I can send you more specific data if you give me a ballpark idea of there you are.
Q: I heard about Alt-A loans that will take over subprime mess.
A: Best guess at this point is that the ALT-A mess will impact the upper end of the market in the same way the sub-prime fiasco hit the bottom end. It is too soon to tell what Obamaâ€™s plans will do here.
You really have to ask yourself some soul searching questions, such as the following:
â€¢ Why did I buy the property? For a roof over my head, long-term security, investment? Other reasons? Are those reasons still valid?
â€¢ Can I still afford to make the payments? If yes, and if I was OK with the payments when I bought the house, then how can I justify saying the payments are not OK now?
â€¢ Am I OK living with totally messed up credit for the next 7-10 years? Do I fully understand the implications of messed up credit?
â€¢ When I examine messed up credit with all itsâ€™ implications, is it better to sit and wait it out?
My advice to people who can afford to stay in their homes is to do so. You will not realize a loss unless you have to sell, and in the meantime, the primary goal of a house, a roof over your head, is still intact. In all likelihood, you mortgage payment is currently less than you would need to pay to rent a comparable home AND your income tax deduction remains in place. As youâ€™ve already realized, put extra money into other venues instead of your home.
Loan modification programs, short sales and the like only work for those who may lose their home if drastic action is not taken. Hardship must be demonstrated to qualify for any of these programs and the verification process is VERY invasive.
If you could afford your home a few years ago, and can still afford it today, stay put and wait it out. The credit and heartache you save will be your own.
Here are a couple of posts that may be helpful:
There are also some specific market posts that may be helpful. Let me know if you need anything else.