Profile picture for Pghpdx

I have only owned my house for 3 years. Could the value really go down that much?

I purchased my house for $325,000.00 and the apprasal for a refi came in at 275,000.0. I can't believe that it went down that much and now we don't qualify for Refinance.  Does this seem shocking? Maybe I paid tooo much for my house in 2008?  Should I get another apprasal?  I wanted to get a 20 yr refi for 3.8 now we can't. My lender is now trying to talk me into the HARP program and I really don't want to sign another 30year if I can help it.  What do you think?

  • September 12 2011 - Tigard
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Answers (16)

Based on your chart here, you did better than average. A new appraisal might be worse.
  • October 05 2011
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We are all faced with the declining value bug, myself included. Thought I struck a great deal in July of 07, only to probably loose my 20% down payment if sold today. However, one way to think about things are is your payment the same as rent? If so the only real solution is ride it out, short-sale or modification. Prices here in S. Florida (Palm Beach County and south) have reset to 2001 prices. Ouch is right...
  • October 05 2011
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In my area some houses have gone down a lot more than that.  In 29 years I haven't seen the prices so low!  I did a neighborhood study on a country club in my area last night and houses built in 2007 and 2008, with permits showing  costs of up to $325,000 to build plus $22,000 for pool and enclosure plus lot prices of $40,000 or more has a justified value from the Property Appraiser at $250,000+/-.  Lots which sold for up to $49,000 are now rated at justified value of $13,700.  The smaller homes in the neighborhood with not as many upgrades seemed to hold their justified value better.  In the past the justified values set by the Property Appraiser were 20% to 25% lower than the sales prices and now the justified value set by the Property Appraiser is pretty much in line with what properties are selling for!

When looking at doing refinancing be sure to count in all the costs of establishing the mortgage and weigh those costs against how much you save monthly.  In the past the rule of thumb was that it was a good idea to refinance if you saved more than 2% in interest and you were going to live there another 6 years...not sure what it is now.  The old standard rules are being broken daily! 

Good luck!  The whole country is suffering.  Only a lucky few aren't suffering.  And as an afterthought...you might consider doing a short sale to get out from under the mortgage and then buy something else at today's prices and today's low interest rates.
  • September 26 2011
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Profile picture for sunnyview
" Look at what property comps the appraiser used, there cannot be any REO properties."

Says who? Bank owned and short sales constitute the bulk of the sales in many areas and as far as I know, appraisers do use them. Please post a link if you have other information that says that they can't.
  • September 22 2011
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Profile picture for Wrightkym
Well your first question, no it is not shocking.  As many of the other agents have told you,we have seen drastic drops in our area.  Your second question, paying too much is hard question to answer.  If you are buying an investment property that you expect a return then you might judge the value of too high or low.  When buying a personal residence, the driving factors for buying your home was probably more than how much you were going to make on the home.   Now the hard part is the third question.  The appraisal will be tough to get a rebuttal, but you can try.  Look at what property comps the appraiser used, there cannot be any REO properties.  Have your loan officer assist you in finding strong comps that have sold in less than 90 days in the same area.  Banks do not really care about upgrades or other "value" enhancers.   With rates dropping, you might be able to get a very low 30 year that would ease your monthly burden, just pay one extra payment and you can drop the pay off to 21 years!
  • September 22 2011
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The values of ALL real estate have dropped consistantly since 2008.
It is also entirely possible that the value of your property is STILL moving downward! Lenders and real estate brokers are offering their best advice and programs to assist buyers and sellers with their real estate issues.
Is it shocking, you ask. The answer is that we are all shocked by how the marketplace reacted. It seems that you are just catching on now.
  • September 15 2011
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You can inquire about an appraisal rebuttal. Be ready with your comps but understand the appraiser used the comps he did for a reason, often adjustments have to be made and they must fall within certain guidelines. If they don't the underwriter will ask for a desk review which will likely result in you having to pay for another appraisal. Plus there is no guarantee the value will be there the second time around. Our market in 2008 was just heading into the declining market so it is very possible.

If you can reasonably take advantage of HARP you can still make higher payments voluntarily and it has been a Godsend to some to have a 30 year payment to get to fall back on should the unforeseeable ever happen. 
  • September 14 2011
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You're doing pretty good Pghpdx.  In Southern California, many properties have gone down 30-40% in that same time frame.
Hopefully you bought it to stay in it.

You'll have to consider all the benefits and detriments of any program presented to you.

Good Luck,
Cameron
Corona, California
  • September 13 2011
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Profile picture for sunnyview
I would run the numbers and see if you can reduce your payment with HARP. It may be worth doing if you can save money without paying for a conventional refi with PMI.

My house was not underwater, but I benefitted from the HARP program with a rate of one point lower. For the 12 months, I sent the money I saved on my interest rate toward principal to shorten the loan term. Now I just save that amount. Look into it. Run a calculator here and see if it makes sense in your situation or not. Hope it helps.
  • September 13 2011
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Sadly - yes.  As the other's have posted, you purchased right before the market took the hard shift.  Have you looking into a shorter time refi.

Do recommend a qualified appraiser to give you an accurate view of your market.  Good luck!
  • September 13 2011
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Profile picture for the_country_hick
You did overpay in 2008. So did almost everyone who bought at the same time. To see why look at the thread below and look at the links inside.

Do you know what the housing bubble really looks like? ... - Zillow Real Estate Advice

Prices dramatically increasing from 1998 to 2006 were not cyclical. They were bubbled. Inflation adjusted those prices may never return in our lifetimes.

Real estate went into bubble pricing and that pricing is now slowly deflating.

If your monthly payment goes low enough paying PMI does not matter. Look at the total monthly cost not one part of it. Most loans allow PMI to go away once your owed balance goes to a certain percentage.
  • September 12 2011
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My office is in your zip code (Lincoln Center) and there are pockets all over, from Garden Home to Tigard, where values have fallen a lot. As for your appraisal--appraisals for refi's always come in low.  You can try for another and pay the $400 or $500, but you might get the same result.

I think you can ask your lender to have the appraisal reviewed.  You might give that a shot.
  • September 12 2011
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Must you refi at this time? If so, some of the facts about HARP may be found at this link: 
https://www.efanniemae.com/sf/mha/mharefi/pdf/refinancefaqs.pdf

If your new payment is affordable, I would not focus on issues like home mortgage insurance, etc. Keep your eye on your goal of making your payments affordable and getting in to a stable payment schedule that won't change suddenly with interest rate changes over time.

Don't worry about the 30 year term, the longer the term, the lower your payment. Most people do not stay in their homes for 30 years. 

Hope this helps you!

Best of luck! 
  • September 12 2011
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Profile picture for Pghpdx
is it worth getting another apprasal?  I wanted to get a 20 yr refi for 3.8 now we can't. My lender is now trying to talk me into the HARP program and I REALLY don't want to sign another 30year if I can help it.  What do you think? Should I just go with the HARP?  I guess it is the only choice I have unless I want to pay mortgage insurance which eveyone says is evil.
  • September 12 2011
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Profile picture for Pghpdx
I Live in 97223 Far SW Portland/Tigard Thanks!
  • September 12 2011
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Yes, unfortunately you are not alone. You did not overpay in 2008,it's just that none of us can predict the future and at that time the price was right.

In most cases, it is best to think of real estate as a long term hold. In CA, we've been fortunate that real estate has been in high demand over a long period. Even so, prices have declined here.

Many people feel that real estate ups and downs are cyclical. 

Prices have continued to decrease, on and off over the last 3 years. The bright spot here is that interest rates have been so low, that even without a refi, hopefully your payments are affordable for you and you can enjoy your home without disruption.

You don't say where you live. I am an agent in Newport Beach, CA.

I hope that this helps you!

With best regards,


Carol Lee
the [beach + bay] group
Surterre Properties
CA DRE: 01402855

[phone number deleted by Zillow moderator. Please refer to our Good Neighbor Policy for posting guidelines]
  • September 12 2011
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