People Canceling Housing Contracts in the D.C. Area

In today’s Washington Post, there is an article about the increase in potential buyers who are canceling contracts on new homes  because they can’t afford them.

I may be in the minority on this issue, but I really don’t care.  Most people who purchased homes in this area used arm’s and interest only loans, because they were not able to afford the house in the first place.  The housing market in the D.C. area  is out of control because a lot of people were flipping houses for profit.  Now since interest rates are starting to increase, some are not able to afford the payments.  Those who did not refinance or sell their homes a couple of years ago are kicking themselves.  I have no sympathy for any of these people.  At least they have a home and own property, many of us are forced to rent because 1 bedroom condos are selling for 325K.  

I am a single professional and I can’t even afford a condo in a decent neighborhood because of people who milked the housing market; now they want to cry and complain.

As far as the couple highlighted in this article, Irica and James Cheeks, I really have no sympathy for them.  They all ready live in a  house valued at 625K.  they want to move into a more expensive house and thought that since the market was so hot and people were making huge profits from flipping and selling their homes, that they could do the same and move into their “dream” house valued at 900K.  

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“With little success in selling their home and a settlement date rapidly approaching on a new $900,000 house in Clinton, Irica and James Cheeks last month decided to walk away from that dream house and their $60,000 deposit.”

“The Cheeks said that when they signed the contract to buy, in spring 2005, they had no idea the market would turn as quickly as it did. They decided on the house from Ryan Homes, part of Reston-based NVR, after they grew tired of losing bidding wars for resale homes, said Irica Cheeks, 33, a marketing manager for a nonprofit organization in the District.”

“They figured they would sell their house, also in Clinton, for about $725,000. That factored in the way the value of the house had been climbing. But now, after three months on the market, the house is priced at $670,000. “

When you make investment transactions in real estate that is one of the risk you take.  These are personal choices, they did not have to move out of their 600K home to a 900K home.  They wanted to buy their dream house, which I have no problem with, but did they prepare enough just in case their dream could not become a reality?  I’m sorry, I have no sympthay for them.  A lot of hard working middle class people like myself are trying to survive and buy a piece of the “American Dream” but are shut out because of outrageously priced houses and condos.  I hope the maket falls even more in the upcoming months so that the neglected class (the middle class) can finally be able to buy real estate.

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4 Responses

  1. Well,

    This article is a perfect example of why I don’t want to buy in this area. I’m pulling up my stakes here eventually and heading to B’more.

  2. Wow, I’m just having a great time reading your posts during my lunch break.

    Anyone who can “walk away” from a $60,000 deposit because they were dumb enough to make that deposit without first selling their current home is an idiot and not worthy of any sympathy.

    The housing/mortgage industry in this country is a scam. Builders will put people into houses and mortgages that are completely unrealistic for them, and this completley irresponsible lending is allowed to continue because so much of our “house of cards” economy is dependent on the housing industry. Not to mention the real estate lobby.

  3. I just came across this article after googgling my name and saw that my husband and I were the highlight of your blog. Despite what has happened to the economy and the housing market we moved into our house and are happy with our decision. We could have walked away from the money and would have been fine financially but chose not to. We didn’t cause the market to change and sympathy is not what we wanted trust and believe that. It was a chance to expose what was happening in the housing market and I would do it all over again. It’s unfortunate that so many people were caught in tricky loans. Who could have imagined that our story was just the tip of the iceberg and the downward spiral that has happened in less than three years? For us our story was a happy ending but for so many others it has been a nightmare.

  4. My apologies for “internet trash talk”. I’m sure you are good people . I was a bit keyed-up at the time I wrote this. Good luck to you.

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