I’ve come to the realization that the value of my house will most likely drop below what I paid.  Which is depressing.  Luckily, we shouldn’t ever be upside down since we put down a decent sized down payment and have paid extra along the way.  But still, it sucks.  We paid $184,000 and it’s currently worth $189,000 on Zillow.  This is down from $350,000 at the high.

This knowledge sure makes me think differently about buying a home.  Don’t get me wrong.  I’m glad we own, I’m fine with what we paid, and we don’t plan to sell for a very long time.  But even though we bought our house, not as an investment, but as a place to live, I still had the mind set that we would make money on the deal.  It wasn’t a conscious thought.  I didn’t buy the house thinking that we would get out every penny we put in.  But somehow the whole “get rich off real estate” thing sunk in.  I see now that I was fully expecting to always have more equity than I had paid in payments.

For example, we have paid about $83,000 towards the house including our down payment and interest.   Right now, according to Zillow, we have about $45,000 in equity.  Which under my old thinking, that means we’ve lost $38,000.  Which in a way, I guess we have.  If we hadn’t bought this house and saved all our money we would have $83,000 instead of $45,000.

But let’s think about it a little more.  We have also lived in this house for 4 1/2 years.  How much would we have paid in rent over the course of 4 1/2 years?  According to Rentometer our house rents for about $1,300 a month.  So over the past 4 1/2 years we would have paid $70,200 in rent and we would have no equity at all.

So what does that mean?  Well, we’ve paid about $13,000 more to buy our house than to rent it.  And in return we have $45,000 in equity.  We are still ahead.  So far.  But how much more will it drop?  Who knows?  But no matter what we will continue to stick it out.  I truly believe that in the end we will come out ahead.  I guess the hard part is letting go of the guarantee that the market would pay us to live here.

pic by: asianjournalusa

Thanks for reading. If you enjoyed this post consider subscribing!

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Related posts:

  1. A tale of three mortgages
  2. Net worth
  3. How I almost got caught in the housing bubble.
  4. We got paid!
  5. 10 tips to get your house sold