Timing is everything

Friday, 3:38 pm

By Kate

Aug

12

2005

In the last couple of weeks, I’ve noticed that some economists have started talking about the real estate/housing bubble losing some air. Paul Krugman wrote about it last week and Atrios has been making note of various people discussing it, too. I’ve been expecting it to happen, but hoped it would wait another year or two.  My plan has been to sell my house after the lad goes away to college and find something in a slower market (they do exist) and buy for cash and bank/invest the rest. Alas, my plan may not work as I’d intended. Or not nearly as well as I’d intended.

Back when I bought my house, the nation was at the tail end of the previous real estate crash of the early 90s. I bought my house at bargain basement cost after the developer went bankrupt and simply unloaded all the houses in this neighborhood at a huge loss. It was great for me, surely. And, over the last 11 years, I’ve watched, quite incredulously, as my house has increased nearly 3 times in value. As of this moment, I have roughly 75% equity and a very low fixed rate mortgage. In the current market, that’s a great place to be.

But it looks as if all good things must come to an end and the timing is lousy. I’ve noticed recently that houses for sale in town have not been selling. For Sale signs have been there for several weeks. That’s definitely a sign of a weakening market. In the past few years, houses for sale didn’t stay on the market long enough for the real estate agents to even sink a sign in the ground out front. They were listed and sold the same day. There was even a bidding war on the house across the street about 4 years ago. I suppose in the coming market, I’ll be better situated than some of my neighbors who are mortgaged to the hilt with interest only payments. But I think the window of opportunity is just about closed on my plan and that makes me nervous.