Understanding real estate walkaways

Mood of the Market

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted May. 23, 2011

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This is what I hear as the subtext behind the woman's statement that if forced to, she'd just walk away: I'm not willing to sink my family's entire financial ship over this asset.

Of course, there are certainly some much more grim implications to this evolution in the way we think about real estate. Ask anyone in the foreclosure hot spots in California, Nevada and Arizona.

When home values begin to decline widely, jobs leave, and people start walking away en masse so that everyone knows someone who has done it -- and lived to tell the tell -- it becomes extremely difficult to stabilize the market and avoid a complete plummeting of the entire market.

Not only do home values drop, so does sales activity as buyers become more and more fearful of continued value declines after they buy.

One of the issues with developing a more mature, less extremely optimistic and emotional attachment to anything in life, including real estate, is that it is very hard to rewind these sort of awakenings.

You've experienced this sort of thing as you grow awake to not just the parts of an issue in life that you love, but also the warts and gritty elements that make up the whole picture -- you grow, and are empowered to better assess and make decisions.

But some of those more informed, wiser decisions are painful. The outcomes, like the truth that caused you to evolve in your understanding, also have lovely and excruciating elements about them.

And so it is with America's real estate awakening. Lovely. Mature. Wise. And occasionally, excruciatingly painful.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

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