House Poor: Under Water and Over the Hill

House Poor

Under Water and Over the Hill

‘By

Homer Guthrie, Expert Homeowner

Whoever said ignorance is bliss sure knew what he was talking about, especially when it comes to mortgages. The less I know about my mortgage, the happier I am.

I don’t even open the monthly statement I get. I just pay the same amount every month-on the very last day that I can mail it back without getting my credit dinged. Why would I ruin a perfectly nice day by thinking about how many thousands of dollars we still owe and how old we’re going to be before it’s all paid off?

Except for the statement we get every January that includes our mortgage interest deduction for the year. I always rip that one open as soon as it arrives to find out how much Uncle Sam would like to reward me with a big tax deduction for doing my patriotic duty and buying a home. I think it’s in the Constitution somewhere.

So when I got my MID this year, I was in such a good mood that I lowered by guard and let my eyes wander to the line that said “balance owed.” It was even worse than I thought. I tried to forget it, which usually works because as my wife Felicity can tell you, I’m very good at forgetting things. No such luck.

A few days later, I get an email from one of those Web sites that use a computer to calculate how much your home is worth based on how much the homes around you are selling for. Since I live in Mirage Mills, known everywhere as the Chernobyl of American real estate, every home within three miles of that’s sold in the last two years has been a foreclosure. So I REALLY didn’t want to know how much little my house is worth, but I had no choice.

HOMER GUTHRIE, GREAT NEWS. Prices are rising in Mirage Mills. Your house is now worth only 47% less than you paid for it!

Thanks for nothing, I grumbled to myself. How the hell did that happen? Once again, I turned my forgetter on full power and once again, all I could think about all day was how 47 percent was almost as bad 50 percent. So why didn’t they just round it off and spare me the details? I looked at the email again and discovered that last quarter, our home really HAD lost 50 percent of value. Recouping 3 percent in value was the good news part. Great moments in marketing.

They call it being under water, but it felt more like being cast face down in a burning desert in despair as vultures circled above and waves of stinging red ants swarmed in every orifice. I gazed out at the shuttered casement windows and empty driveways of my cul de sac and realized I had been underwater for a long time and didn’t know it. Ignorance is bliss.

I broke the news to Felicity at breakfast the next morning, after a sleepless night.

“And just what does that mean, dear, being under water?”

“Basically, it means that we can’t sell the house without losing money,” I said.

“Oh, that’s good,” she said.

“Good? How could it possibly be good?”

“Well, I like it here. And you’re a terrible mover.”

Read House Poor every week in Real Estate Economy Watch