So Long Good Neighbors

Less than three years ago my wife and I bought a home in a new development, shortly after the housing market took a nose dive. Since we were only the third committed buyer for our phase, we were lucky enough to pick our lot, choose all of our upgrades, and watch our home being built.

We finally moved in December of '07, one week before Christmas. Only two other neighbors had moved in, and most of the remaining twelve houses were under construction. Finally, about 4 months later, the rest of the neighbors moved in, all on the same weekend. It was cool...like, instant neighborhood.

We were really lucky. Moving in together allowed us to meet each other and become friends. We've had great block parties, a lot of fun times, and the comfort of knowing that the neighborhood was safe.

We also believed, but never said openly, that we would all be neighbors for life. We had bought after the peak; after the bad loan era, and could afford to own our homes. Right down the street, in the next block, people in phase one were already losing their homes to foreclosure, having bought at the peak of the market, with ARM's.

During the last block party, I noticed a difference. Everyone seemed subdued, or didn't come to the party at all. One of the original neighbors spoke openly about walking away from their home. Another discussed the impending loss of work hours, and the distinct possibility that his wife was going to lose her job. It was an eye opener.

Since that time, perhaps six months, my next door neighbor walked away from his home. On the opposite side of my house, I am working on a listing agreement with the other neighbor. Unfortunately, through job loss and company transfer, they can no longer stay in their home, and must sell within the month, even though, under normal circumstances, they could easily afford their mortgage.

I think that most people look at this housing disaster as something only affecting those folks who commited to too much home, and extremely poor financing. But things have changed. The trickle down effect, has caused layoffs, and is forcing responsible home buyer's from their homes. Terrible!

I ran some comps on my neighbor's home, and found that they are close enough to the payoff amount to possibly avoid a messy short sale. It will be close, but I think I can make it happen. I ran over to tell them the good news, and watched as their shoulders sunk, and realized that their initial investment of $180k had just gone down the drain.

It's a very difficult time for some really great people. The sense of uncertainty is really hard to deal with sometimes. I can tell that home prices have stabilized, and are creeping up. I get a feeling that the job market will loosen up next. It will be a slow recovery, but hopefully we'll all be a lot wiser when it's over.

I'll miss my neighbors!

The Rookie