Feeling Upside Down and Underwater

All of us who are “home owners” cringe when we hear in the media every month how our homes have “lost value”.  Arizona in the statistics is reported as having lost 12% value since last year.

The reality is, the value of our home only matters in three instances.

1. When we buy it
2. When we sell it
3. When we pay taxes on it

The rest of the time, the “value” of our home is relative.

Disturbing Thoughts Affect Attitudes About our Homes

The focus on real estate in Tucson and most other communities in the country has been on the foreclosures and short sales that dominate the market.  The discussion permeates the media whether that be newspapers, or television.  We are bombarded with the news of:

• Lost Value
• Increased Foreclosures
• Bank Practices leading to the crisis
• People being thrown out of their homes
• When will we hit bottom
• Failed government programs to help homeowners
• etc.

But, as stated above, unless we who are homeowners have to sell the value of your home isn’t in what we can get for it if we put it on the market, the value is in the quality of life it affords and “a place to store our stuff”.

How About Your Car

Most of us are upside down and underwater on our cars the moment we take the keys and drive off.  But does it bother you?  Usually, NOT, why because we have a car, we drive it around town, we wash and wax it, we are proud of our car.  Does it matter it isn’t worth what we paid for it?

How we perceive our home and car is different.  But the reality is they are very similar, with a bigger price tag.

Here is the big difference.  Your home can easily appreciate in value over time.  It is very rare for a car to do the same.

Many homeowners who bought their homes before the huge run up in prices can still sell, even today, and not be loosing money in the process.  They won’t make as much as they could of a few years ago, but they couldn’t buy as much home in that market as they can today.

Feeling Upside Down and Underwater is for most of us just that, a feeling. 

We’ve watched the perceived value of our own home lose over $100,000 in “value” in the past three years.  How do we feel about it.  Same as anyone, we don’t like it, but we have a nice home.  We continue to make substantial improvements (we added tile to the last two carpeted rooms in the house and put in a back yard and garden).  Our home is now the nicest place we have ever lived. 

Take a fresh look at your home.  The worst thing we can do is get discouraged from the feeling and stop doing routine maintenance.  The best thing we can do is take advantage of the lower prices at places like Home Depot and Lowes (Not an endorsement just where I shop a lot) and add value to our homes at prices about half of what they were a few  years ago. 

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What are you feeling and doing with your home in this economy?