(or Chaundra Carnes)
2008-09-23: Wow, just days later, their home is reduced in price another $60K. Desperation is setting in!!!
No Mas, Crazy Carnes'!!! No Mas!!! Looks like the family from the PBS video that prompted the creation of the Hall of Shame is back to wheeling and dealing houses. Although, I'm not sure they'll be able to find a greater fool to get them out of this mess. Could be the end of the road. If you haven't already, watch the PBS video, also available on YouTube. (NOW - PART 1)
Remember that buyers are also to blame for this bubble. With a household income of just over $100K, why would the Carnes' delve into no-interest loan for over $700K!! They can answer that question best:
Past Due and Pay Day
Michael runs production at a winery and Chaundra manages the office at an auto body shop. Together, they earn just over $100,000 a year.
Back in the days when 30 year fixed rate mortgages were the norm, the Carnes would've been advised to borrow about twice their annual salary - around $200,000. In this market, that old ratio of salary to loan seems positively quaint: the Carnes have borrowed $700,000 — seven times their yearly income.
CHANDRA CARNES: To have a 30 year loan almost seems like you're giving away too much of your money. If you have to take a loan out anyway, why not borrow the most you can borrow. You know if it helps you get the home that you really want to live in.
MICHAEL CARNES: With the value increasing the way, at the rate it is, why not get an interest-only loan to free up more spendable cash per month? And so we ran the numbers. And the guy says, "Yeah, it looks good." And we couldn't believe him. And so we did it. And here we are. And we're really happy. And like I said, we just barely made it. They told us that.
MICHAEL CARNES: In 10, 15 years, we'll have to be a little bit more conservative. But right now, we're living it up - have a house on a hill and we're very happy.
CHANDRA CARNES: You know, the only risk is if housing values go down. And I guess that's a risk we're willing to take. And I think a lot of other people are too. So we're not alone.
Sacrifice your future if it gets you what you want right now! And don't be afraid to do foolish things if "you're not alone." And would you believe they took some equity out of their home for decorating.
Why did the Carnes' risk their future on a $700K loan for a home? Cuz we wannit!!
---------- update: 11-12-2007 --------------
Looks like the Carnes' got lucky and found some bigger fools.
Found this on Zillow:
5903 Mountain Hawk Dr Santa Rosa CA 95409
Summarizing: The Carnes' were very, very lucky. They lost $25K on the price, and with their interest only loan, ended up renting that house for 2.5 years, also having to pay property taxes, upkeep, etc. They now live in a home (APN 161-410-040-000) at an assessed value of $280,698, however, the purchase price was $640,000. I love her comment above: "a 30 year loan almost seems like you're giving away too much of your money". How is paying rent on a $1M home any better? If her husband had any backbone, he'd 'smack that bitch up'.
1086 Elsbree Ln Windsor CA 95492
Zillow: 09/21/2007: $640,000
---------- update: 09-23-2008 --------------
Zillow: 1086 Elsbree Ln Windsor CA 95492
Price Paid: $640,000
ZEstimate®: $545K (5/1/08)
ZEstimate®: $536K (9/19/08)
Looks as though the Crazy Carnes' are figuring out their house isn't worth what they paid. BWAHAHAHA
Listing site: Wine Country Dream (how apropos... Dream)
Other nearby houses for sale:
1026 Elsbree Ln, Windsor $599,000 (bigger lot, about same sqft for house) Taken off market
1032 Elsbree Ln, Windsor $749,500
1020 Lisa Ct, Windsor $649,000
1040 Elsbree Ln, Windsor
9950 Troon Ct, Windsor $974,500
317 Jessie Ct, Windsor $695,000