The day of the week of the month of the year

The charts and spreadsheets available to you on this blog site are now updated to include sales and inventory as of the end of August 2017. Eight months into the 2017 books and we are running a nice and tidy 12.3% above last years numbers in unit sales for Santa Fe city and county. That is music to many ears. To finally have consistent growth and improvement in our market is a welcome milestone. Remember all real estate is local and each home and neighborhood have distinct characteristics.

Nobody said it would be easy and it has not been easy to climb out of the deep hole that the economic crisis put all of us into. But we have succeeded and are not planning to fall back in anytime soon. There was a place and time (maybe around 2009 and 2010) when I firmly believed that residential real estate could lead us out of the real estate downturn, the tremendous loss of personal financial wealth and “loss of savings in the form of home equity” that we experienced.

It would have taken a mea culpa from the big banks (the ones too big to fail) accepting the millions of bad loans they had on their books as truly bad loans. It would have taken them swallowing a huge pill of write-offs, effectively lowering the principal balance of millions of home loans by tens of thousands of dollars. And all for what? To be done with the depression years sooner? They got bailed out (at least the ones that did not close up shop) so what did they care? The personal health and well-being of the CEOs and stockholders of those big banks would have had to admit to stupidity and white-collar crime, but it would have gotten things upright in a much faster timeframe.

No it did not happen. They took the bailout terms and never admitted guilt. They foreclosed on millions of Americans who were lied to when they bought homes they could not afford. The big banks profited when the loans were made and got insurance on most of the loans that failed to payoff in full. Those consumers that were innocent and actually qualified for the home loans they took out still suffered because of all the other junk and debris around them. Homes were sold for $400K that were worth $325K. When the home buyer moved in, the appraiser said it was worth $400K. But after the 3rd year of fixed payments, when the monthly debt service doubled or tripled, then the owner had a home worth more like $300K or $325K so if they owed $350K, what were they supposed to do?

I know of many that lived through the storm and did not abandon their homes and declare bankruptcy and/or sign a deed in lieu of foreclosure. They kept paying every month and yes, sooner or later the balance came down enough that they no longer owed more than the home was worth. It took ten years or possibly longer. And the entire time they had no increase in net worth and spent every cent they made keeping the payments up and not taking vacations.

What is your recollection? Here is mine. I am a little bitter about the dishonesty at the top of the money pyramid, and also a bit proud that I did not cave in and deed my home to the bank when it was worth less than I owed against it. Now that its finally worth what I paid for it in 2001, I am selling it. Maybe the money I spent on a new roof, new stucco and other necessary things is offset by the deduction of mortgage interest? I sincerely doubt it, but will do the math if it will help me accept 16 years of ownership and upkeep just to have nothing to show for it now.

The lesson that a home is not an ATM is not that difficult to learn. I never treated my home like an ATM. I used equity to pay for roof and stucco and other things the property required. The tough love that homes do not always go up in value is something I still see people struggle with. They expect their home to be worth more in the years after they purchased it. But in Santa Fe residential real estate, is that a reasonable expectation? Ask your friendly Realtor to help you arrive at a market value. No rules apply evenly to all property.

Remembering the tragic events of Sept 11, 2001 brings humility and respect to front of mind. We only are handed this one life and we should live it to the fullest every day. With hurricanes bringing pain and suffering to so many millions, being thankful for what we have is an everyday event. And if we can help others we are better people for taking action. We all have so much to share.

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