Sunday, August 23, 2009

Sweet Home Equity Gone Sour

In the aftermath of better living through tapping home equity, what are things like for the Home ATM users? We may not have the detailed answer to that question, but we can certainly see how they're doing on the home-front. Let's go back and look at an example from '07.

In 2007, Mr. Marshall Whittey openly admitted to better living through sweet home equity in the pages of the NY Times. Lavish wedding, trip to Tahiti, flat screen TVs (the ubiquitous home ATM purchase, I might add), shopping sprees, new cars, ... nothing was beyond financial reach if you "owned" a house during the peak bubble years.

How have the houses of Mr. Whittey fared since the article appeared in the NY Times? Let's take a look at the "investment" property and the personal residence.

Investment Property:
915 Demos Ct, Reno, NV 89512
-- 2006-01-03: $444,000 ARM with CTX mortgage
-- 2006-01-03: $111,000 2nd with CTX mortgage

Sold: $215,500 on Mar 31, 2009
4 br 3 ½ ba 2,960 sqft $73/sqft

From $555K to 215K. Wow!!!

Personal Residence:
404 Alysheba Ct, Reno, NV 89521-6274
4 beds, 2.0 baths, 2,017 sq ft
06/08/2005: purchase $283,900 with Universal American Mortgage
03/01/2006: $30,000 HELOC with Countrywide
11/20/2006: $375,000 REFI with First Magnus
06/08/2005: $355,000 (unsure about the sales history vs HELOC/Refi)

Zestimate®: $259,000

Here is a similar property in the neighborhood, currently listed for $249K, and it has been on the market for 114 days: 470 Miesque Ct

Investment Property Loss: $340K
Residence Property Loss: $100K (conservative estimate)

We're looking at total losses of approximately $440K. When/if he walks away from his current under-water situation with this residence, the number should grow. You might ask, who carries the burden of these losses. The answer is simple, it's right HERE.


FOFOA said...

Tyrone, Reveal thyself!

Hey there. I'm looking for a few picture ads from back in the day (peak time) of ridiculously small houses with outrageous asking prices. Like $1,000,000. I seem to remember one from Pasadena.

Any help would be appreciated!


Tyrone said...

Your wish is my command.

Pasadena is a target rich area. Dr. HB has is well covered. Here are a few Pasadena-related stories from him. Hope it helps.

Real Homes of Genius – Pasadena Million Dollar Home or $3,500 a Month Rental? You Decide.

A Foreclosure Process Lasting over Two Years in Pasadena. What is the Estimated Value of Shadow Inventory in Pasadena?

Pasadena Home Back to 1996 Price Levels? The Pasadena Housing Market Food Chain – 4 Homes from Low Price to High Price all in Distress. Foreclosures and Short Sales in Prime City. Almost 4 out of 10 Homes in California Underwater.

Today we Salute Pasadena. When losing $300,000 is Actually a Gain for Housing Values. Shadow Inventory Twice as big as Public Data.

Pasadena Home and Bring Your Own Bulldozer. Flipping Homes in the Worst Housing Market in a Century. Granite Countertop Redux.

Good One!!!
4 Homes in Pasadena. Every Zip Code in Pasadena Seeing Pricing Pressure. Housing Enters the weak Fall and Winter Seasons.

Another good one!!
Case Study of the Middle Priced Los Angeles Housing Market. Pasadena in Focus. The Alt-A Mortgage Debacle Gearing Up.

End of $1 Million Home in Pasadena and the Extinction of Mortgage Equity Withdrawals.

Today we Salute you Pasadena. $87,000 off in 2 Months for 937 Square Feet.


FOFOA said...

Thanks Tyrone!

Those are all appropriate houses, but not exactly what I'm looking for.

Hopefully it exists. I'd like to find an actual realtor advertisement from the peak. But not just any ad... a shocking ad! At least in hindsight.

My fallback it this one...,0,6322407.story

But it is current! And it is not perfectly formatted for what I'm looking for. Perhaps I'm looking for the kind of ad that would be in a real estate listing book! You know, all info contained in a rectangle.

Ideally I'm looking for an ad that contains a color pic of the house and the asking price all within a frame I can use as a pic on top of a blog post. One that's big enough, with good resolution and a small house with a big pricetag!