National news and real estate professionals talk a lot about the people who purchased at the top of the market and now owe far more than their homes are worth. They discuss the legal and moral issues involved in strategic default and of course everyone is talking about short sales and the difficulties they present.
But nobody talks about the people who sold at the top of the market.
What did they do? Did they re-invest that money in similarly priced properties – so they’re now facing the same “underwater” situation as the people who purchased their homes?
I know some of them did lose those profits.
Some of them came to our little community and created a “bubble” here.The locals were pretty upset - because all of a sudden, no one who lived and worked here could afford to buy a home.
I know of one mobile home that sold for $136,000 and then 3 years later sold for $245,000. I was the listing agent the first time around, and when I saw what it sold for next I called to see if that had been a typo!
No, it was the real price. Then those buyers invested another $50,000+ into granite counter tops, new siding, a cute little barn, and other improvements. They sold last year for $200,000.
The family that sold for $245,000 re-invested their profit in a waterfront home - at the top of the market - so I guess they didn't come out ahead in the long run either.
But for some, it was like winning the lottery...
Another gentleman I know had a better outcome. I don’t know why he purchased here before he sold his other home, but he did – and he moved in about a mile from me. He had his other home for sale as the market was reaching the peak, but had listed with a disinterested agent. It wasn't even being shown.
I kept nagging him: “Terry, the bubble is going to burst. You need a better agent.” Finally he listened, and a few weeks later the house was sold. Then, within months, the bubble did burst. Had he waited he probably wouldn’t have lost money, because he had purchased before prices skyrocketed. But he wouldn’t be buying the toys he plays with today.
I wonder how many other senior citizens are buying “big boy toys” (or big girl toys) with their profits after selling at the top of the market?
These photos show a couple of the toys he bought with his "real estate lottery" winnings. Since he likes to stay busy, he's also completely remodeled the house he bought here.
And no, these "big boy toys" aren't an indication that he's being selfish. He's a widower, so there's no wife who is doing without toys of her own while he plays.
I just wonder now and then - How many of those sellers are enjoying their profits, and how many lost them?