I live in one of the areas of the country that have been hardest hit by the “housing crisis.”  We don’t have a sub-prime or an adjustable-rate mortgage and despite having a fixed-rate home equity loan, we still have about $20,000 equity in our house.  A year ago we had about $50,000 in equity.  We were originally planning to move to a different suburb in 2009 but now I’m not so sure it is going to happen.  First, I don’t know that our area has seen rock bottom as far as prices go.  We don’t *have* to move and while it is a great time to buy it is an absolutely horrible time to sell.

So we’re debating whether to put the house on the market in January of 2009 and hope it sells before school starts in Fall 2009.  It may, it may not.  The other option is to stay in the house until 2011.  In that time hopefully things will recover a bit, we’ll likely have paid off all of our credit card debt and our car’s payoff is in May of 2011 (if we keep it and don’t pay it off earlier). 

The other wrench that his been thrown into the plans is that some mortgage lenders have actually blacklisted our area!  In other words, fewer loans are being made for houses in our area and those that are being made need quite a bit more of a down payment.  With only $20k in equity there is no way we’ll be able to pay our closing costs and have even a 10% down payment.  Our ideal house, one that fits our wants and in the school boundaries that we want, runs about $350k in this market (our current house is worth about $275k so not a huge difference).  There is no way we can squeeze out a $35k down payment in the next 18 months unless my freelance writing career really takes off hehe.

If we wait until 2011 it is likely that our $350k house will be $500k.  House prices were we live definitely aren’t cheap!  However in those three years, if things start to look up, we’ll have a better chance of clearing $50k on the sale of our house for a 10% down payment.  That still leaves us with another 10% to deal with in order to skip the PMI.  I tell you, paying a mortgage without PMI is nice!

Decisions, decisions.  I figure we’ll go ahead and plan on putting the house on the market in January and make the necessary repairs/upgrades over the next 10 months.  Then we’ll let the market conditions guide our decision.

Whew!