{"id":6099,"date":"2009-06-29T09:06:39","date_gmt":"2009-06-29T16:06:39","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=6099"},"modified":"2009-06-29T09:07:23","modified_gmt":"2009-06-29T16:07:23","slug":"the-neighbors-paid-what","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2009\/06\/29\/the-neighbors-paid-what\/","title":{"rendered":"The Neighbors Paid WHAT?"},"content":{"rendered":"<p>In our discussion this weekend about why people would walk away from a mortgage, even though they can afford to continue paying, Tim Kane (S-Crow) <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/06\/28\/poll-do-you-personally-know-someone-who-has-walked-away-from-a-mortgage-they-could-afford-to-pay\/#comment-76853\" title=\"Comment by Tim Kane\">pointed out<\/a>:<\/p>\n<blockquote><p>It doesn\u2019t take much emotional pull to consider walking away when you see property being purchased across the street for $150,000+ less than what you may have purchased your place for in 2006 and it costing substantially less to cover the monthly payment at today\u2019s market prices. This is more prevalent in newer developments and I would guess can make for interesting neighbor to neighbor discussions.<\/p><\/blockquote>\n<p>Well, I spent a little time on Redfin looking at some new construction homes for sale, and it didn&#8217;t take long for me to find some examples similar to Tim&#8217;s hypothetical scenario:<\/p>\n<hr style=\"border: 1px solid #000000; clear: both; margin-top: 0px;\" \/>\n<img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2009\/06\/Camwest-Aspen.jpg\" title=\"Camwest &quot;Aspen&quot;\" alt=\"Camwest &quot;Aspen&quot;\" style=\"border:1px solid #000000; float: right; margin: 5px 0 5px 10px;\" width=\"175\" height=\"147\" \/><b>Development:<\/b> <a href=\"http:\/\/www.camwest.com\/WF\/community\/community.asp?commid=1037\" rel=\"nofollow\">Camwest \u201cTambark Springs\u201d<\/a><br \/>\n<b>Floorplan:<\/b> ~1,700 sqft, 3-bed, 2.5-bath \u201cAspen\u201d <em>(pictured at right)<\/em><br \/>\n<b>Past sales:<\/b><\/p>\n<ul style=\"margin-top:0px; margin-bottom: 0; \">\n<li><a href=\"http:\/\/web5.co.snohomish.wa.us\/propsys\/Asr-Tr-PropInq\/PrpInq02-ParcelData.asp?PN=01058000000200\" rel=\"nofollow\">Nov. &#8217;06 @ $395,808<\/a><\/li>\n<li><a href=\"http:\/\/web5.co.snohomish.wa.us\/propsys\/Asr-Tr-PropInq\/PrpInq02-ParcelData.asp?PN=01058000003600\" title=\"Parcel Number 01058000003600\" rel=\"nofollow\">Feb. &#8217;07 @ $403,950<\/a><\/li>\n<li><a href=\"http:\/\/web5.co.snohomish.wa.us\/propsys\/Asr-Tr-PropInq\/PrpInq02-ParcelData.asp?PN=01058000003200\" rel=\"nofollow\">May &#8217;07 @ $396,975<\/a><\/li>\n<\/ul>\n<p><b>New units\u2019 current asking price:<\/b> <a href=\"http:\/\/www.redfin.com\/WA\/Bothell\/3610-183rd-Pl-SE-98012\/home\/12176985\" rel=\"nofollow\">$319,950<\/a> (~20% off)<\/p>\n<hr style=\"border: 1px solid #000000; clear: both;\" \/>\n<img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2009\/06\/Camwest-Renton.jpg\" title=\"Camwest home\" alt=\"Camwest home\" style=\"border:1px solid #000000; float: right; margin: 5px 0 5px 10px;\" width=\"175\" height=\"147\" \/><b>Development:<\/b> <a href=\"http:\/\/www.camwest.com\/WF\/community\/community.asp?commid=1034\" rel=\"nofollow\">Camwest \u201cShamrock Heights\u201d<\/a><br \/>\n<b>Floorplan:<\/b> ~2,500 sqft, 3-bed, 2.5-bath <em>(pictured at right)<\/em><br \/>\n<b>Past sales:<\/b><\/p>\n<ul style=\"margin-top:0px; margin-bottom: 0; \">\n<li><a href=\"http:\/\/www5.kingcounty.gov\/kcgisreports\/property_report.aspx?PIN=7708200550\">Jul. &#8217;06 @ $563,950<\/a><\/li>\n<li><a href=\"http:\/\/www5.kingcounty.gov\/kcgisreports\/property_report.aspx?PIN=7708200930\">Oct. &#8217;06 @ $564,950<\/a><\/li>\n<li><a href=\"http:\/\/www5.kingcounty.gov\/kcgisreports\/property_report.aspx?PIN=7708200910\">Apr. &#8217;07 @ $543,000<\/a><\/li>\n<\/ul>\n<p><b>New units\u2019 current asking price:<\/b> <a href=\"http:\/\/www.redfin.com\/WA\/Unknown\/Unknown-Unknown\/home\/12303666\">$459,950<\/a> (~19% off)<\/p>\n<hr style=\"border: 1px solid #000000; clear: both; margin-bottom: 15px;\" \/>\n<p>In the first example above, if we (very generously) assume that the folks that bought in \u201806 and \u201807 had 20% down payments and got 30-year fixed-rate mortgages at the going rates at the time, their payments would presently be around $2,400.  Today\u2019s buyer with the same sized down payment would have a monthly payment around $1,700.<\/p>\n<p>That\u2019s a ~30% difference in payments.   The &#8217;06-&#8217;07 buyers are spending $8,400 a year more for the same house as their neighbors.  I imagine most people can think of lots of things they\u2019d rather do with $8,400 a year than to continuously pay for a poor decision they made years ago.<\/p>\n<p>There are tens of thousands of buyers around Seattle who bought at or near the peak with little to no money down. Many of them even got a mortgage that they can technically afford (got ramen?). At the time they bought, it made sense to them to squeeze their budget, because they bought into the notion that if they didn\u2019t get something right away, they would be <a href=\"http:\/\/pricedoutforever.com\/\" title=\"Priced Out Forever!\"><strong>priced out forever<\/strong><\/a>.<\/p>\n<p>Every month that these peak buyers spend in their peak-purchased house they\u2019re basically &#8220;throwing away&#8221; hundreds (sometimes thousands) of dollars. Selling isn\u2019t an option, because they owe so much more than the home would sell for. Walking away starts to make sense.<\/p>\n<p>I\u2019m not saying I necessarily recommend walking away as a course of action (or that I don\u2019t), but I can absolutely understand the rationale, especially when you&#8217;re in a situation like the above examples, where people buying the <em>exact same house<\/em> today are paying thousands less per year.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In our discussion this weekend about why people would walk away from a mortgage, even though they can afford to continue paying, Tim Kane (S-Crow) pointed out: It doesn\u2019t take much emotional pull to consider walking away when you see property being purchased across the street for $150,000+ less than what you may have purchased&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[206],"tags":[39,388],"coauthors":[],"class_list":["post-6099","post","type-post","status-publish","format-standard","hentry","category-features","tag-new_homes","tag-walk-away"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Neighbors Paid WHAT? 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