Green Shoots In The Crater Left Behind By The Real Estate Bubble

A couple of months ago, I initiated a process to combine and refinance my mortgage and the home equity line I took out (primarily to aid DMTC's Theater construction, in 2005). I was worried mostly about job security, and wanted to have the option of reduced loan payments, if necessary, in the event of lower income.

I'm abandoning that refinance effort, because, despite today's rock-bottom interest rates, the costs of refinance are so high that I'd rather run the risks associated with job loss instead. Nevertheless, I went far enough down the road of refinance that I was able to get an objective assessment of my property's value.

The assessment is: $225,097.00. That is higher than I expected it would be. In the worst-case event of a job loss, and trouble with securing a new job, I could settle my $150,000.00 (or so) pile of debts and still have some money left over (presumably for purchasing the van that I would make my home, a la Joe The Plumber). Or, instead, I could move back to ABQ. Or make sandwiches over at Subway Restaurants until things looked up.

That's the nice thing about 'owning' a house near Sacramento's urban center. Not underwater, and having options!

According to Zillow, we are at a housing value 'bottom' right now:

Looking ahead, two in five, or 67 of the 156 markets covered by the Zillow Home Value Forecast, are expected to see increases in home values over the next year, with the largest increases expected in the Phoenix metro (9.9 percent) and the Miami metro (6.1 percent). U.S. home values are expected to rise 1.1 percent.

So, that's only just five years after the peak in 2007, and virtually-identical to the previous housing boom's five-year gap between peak and bottom (1990 to 1995). That's interesting, because the two booms were quite different in nature. I thought, for sure, this time, the collapse would last longer - at least seven years - seeing how bad it was.

It must be that a five-year relaxation time isn't a function of the boom's nature at all, but reflective of another time scale (like a human lifetime of 75 years, or so). No matter how orderly or screwed up things get, that five-year span seems to be baked-in into the recovery that follows.

Nevertheless, surfing the waves of the housing market isn't for the faint of heart: never was, I guess. I hope I can time my departure from the housing market at a favorable crest (2021, anyone?)