Hang Onto That Hat

Well the news is in, and it's not so good. The home appraisal, the one we knew would come in so we could refi and get out from under this terrible-awful-no-good-very-bad loan came in. Really low. Too low. So low in fact that we wondered what exactly was wrong with the appraiser. Did she miss the beautiful carpets and the remodeled kitchen and bathroom and yummy pool?

Not only that. The comps she used were for unimproved homes in the neighborhood and all of them currently underpriced and on the market in foreclosure. Have you heard of such a thing?

We became almost indignant about the whole thing, and her'You have a very beautiful house', that didn't sound disingenuous. Did she miss the 40 yr roof and new floors and front awnings with windowboxes?

We do have a beautiful house. And that assessment made some of us crabby. Ok, both of us, we were both crabby. And so we did what we always do when we need to understand what is going on: we turned to Zillow for comfort. Zillow is a website that shows general valuations for properties all over the country, and although it's not always spot-on, it's not a bad assessment tool. http://www.zillow.com/

Zillow has been around for years. It's entertaining to spy on communities and look up anywhere with an address and zip. Did you know my first new house in AZ is only worth a little more than it was sold for in 1991, and the house with my height chart was sold in 1966 and currently worth 300 times what we paid for it. (San Jose: go figure.)

Zillow shows recent sales, days on market, square footage and sometimes even pictures. It has an aerial view which can intersect Google Maps to see the street and neighbors and has a host of valuation stats. What we hoped to find were more similar comparisons and a way to calculate a higher valuation. We were on it like 2 months ago and our house was listed reasonably high. But what we found all over the city was a market on life support with wild ups and downs in freefall. Someone, get the paddles.

Zillow showed foreclosures outnumber 'healthy' sales nearly 2 to 1 and the only way to establish valuation is with current properties that are grossly undervalued. Nothing has sold in a year. A year...

The property mantra of 'you don't lose what you don't sell' is only the half the story. There are intangibles you lose right away, like the positional value to leverage to build a stronger foundation, and the confidence that a good credit rating is worth protecting. You lose knowing that financial clout will bring about a brighter future and that through it you can adapt to life's unexpected changes.

And most of all, it's hard to put a price on a home because it isn't just an investment, it is where our family takes root. Somehow we've got to find a way to hang onto that hat. Never ever did we expect the assets of the past to become the liabilities of the present.