Letter Re: California’s House Prices Plummet to Surprising Depths

Hi Jim,
We’ve been good about our refinancing. As the house appreciated, we took a little here and there on two re-fi[nancing]s, to pay off most of our credit debt, and to start a business. At this time a couple of years ago, the house was worth $440,000, conservatively. In January, $351,000. Just last night, using a very good evaluation tool called Zillow.com, we were surprised to find that in the last six months, the house’s value dropped [still further,] to just over $250,000. That was a shock. Almost [a] $190,000 [on-paper loss] in less than two years, in an area where we didn’t think that it would go this low. We’ll be fine, due to the sale of another house soon, but the feeling is one of being robbed. Eh, what the heck, we were part of the problem with the re-fi, but those were modest compared to the majority of them out there, and we did do well with what we pulled. We trust God to keep telling us what to do. If we’d listened to your advice, we would have sold the house two years ago [at the top of the market] and rented it back. That $190,000 in the bank would have been great. (Sigh.)

We’ll get by okay. I hope others are able to find their way out via some means that doesn’t include walking away from their homes and their responsibilities. – Randy in the People’s Republic of Kalifornia.