The average sales price for a home in Tooele over the last 12 months is right around $165k. That’s down from approximately $185k in 2007, or close to 12% lower. I have heard of other Utah areas that have declined as much as 18%, so I think that might indicate that the Tooele prices were a little more solid to begin with.
At the beginning of 2006, the average price in Tooele was closer to $128k and hadn’t moved up very much in the previous six years. During that period, there were lots of foreclosures and short sales (before they became popular!) that seemed to keep homes from appreciating very much. If you bought during those years, your property in Tooele–(indeed in the Tooele Valley, including Grantsville & Stansbury Park)—is probably still holding onto some significant equity. If you bought more recently, and/or if you took out your equity, your property value might be upside-down. (Worth less than you owe.)
That’s not necessarily a cause for panic, unless you need to sell right now. (And if you took equity out of your home to buy a ski boat or an RV, you might want to sell those and put the money back into the house to erase your deficit).
So what do you do if you need to move and your payoff is higher than the market value? Here are the options:
1. Sell the boat and RV and use the money to make up the shortage. Sell the house and pay off the mortgage in full.
2. Rent-out the house at a payment that will allow you to keep the mortgage payments current. When property values rise, sell the house.
3. Contact your mortgage lender and look into a short-sale.
A short-sale is a soul-slashing process that will leave you feeling as if life itself is not worth the struggle. (If you’re prone to depression, alcoholism, or rage, you would be advised to enter a short-sale situation only with the utmost caution and you should be under a doctor’s care.)
This advice goes for potential short-sale buyers as well.
Some banks are harder to work with than others. And some people have better experiences than others—but be prepared for the worst. (If you have a Countrywide mortgage—now Bank of America—prepare yourself for working with some of the most stupid, morally reprehensible sub-humans in the business!) Not that I have an opinion on the matter–that’s just what I heard.
More comments to come on short sales.