The title of a recent Fox News story would have us to believe that certain homeowners are to be pitied. Yet, nothing in the story indicates that the homeowners deserve pity. I would be so bold as to say that the homeowners mentioned in the story are victims of their own way of thinking.
The story is titled Shattered Dreams: Arizona homeowners struggling to stay above water
At first glance, the title seems to suggest that the homeowners are struggling to survive financially, but that is not what the story says. Instead, the story says that certain luxury homes are now worth less than what their owners agreed to pay for them.
So, what is the problem? If the owners bought their homes with the intention of living in them, and if the owners can still afford to pay the monthly mortgage payments that they agreed to pay, then the homeowners have lost nothing. How can these homeowners have shattered dreams if they now possess the homes that they desired to possess?
If the homeowners have experienced a significant reduction in their income, and if that reduction makes it more difficult for them to make their mortgage payments, then they truly have a problem. However, nowhere does the story say that the homeowners have experienced a reduction in their income level. All that the story says is that the owners of certain luxury homes can’t sell the homes for the same amount of money (or more) that they paid for them.
What I want to know is why these homeowners bought their luxury homes in the first place.
If I were to interview one such homeowner, then the interview might go something like this:
Me: “So, did you buy your home for the purpose of living in it?”
HO: “Yes, but…”
Me: “Can you still afford to make the mortgage payments that you agreed to pay?”
HO: “Yes, but…”
Me: “Is your home in the same or better condition that it was in when you decided to buy it?”
HO: “Yes, but…”
Me: “Were you happy with the house when you first bought it?”
HO: “Yes, but…”
Me: “When you decided to buy your house, was it worth to you what you agreed to pay for it?
HO: “Yes, but…”
Me: “So what exactly is the problem?”
Here are possible answers to my last question:
1. The homeowner (HO) didn’t really want to live in the home. Instead, the HO bought the home with the intention of flipping it – that is the HO treated the purchase of a home like the purchase of stock. The HO hoped to make a profit from selling it at a price higher than the purchase price. In other words, the HO gambled and lost.
2. The HO doesn’t want to continue to pay the amount of the mortgage payments agreed upon. Instead, the HO wants to pay less so that the HO can have more money to use to pay for other luxuries.
3. The HO was hoping to refinance the home so as to obtain money to use to pay for other luxuries.
4. The HO did experience a reduction in income and can no longer afford to pay for the luxury home.
5. The HO wants to live elsewhere, and the HO doesn’t want to sell the home for less than the HO paid for it.
Folks, please do not misunderstand me. I have no objection to a person purchasing a luxury home if that person can afford to do so. However, I am unable to pity a person because that person no longer wants the luxury home that the person has purchased, or because the person can no longer afford a luxury home.
In other words, I don’t object to a person being in the 1%. I do object to a person complaining about no longer being able to be in the 1%.
Now, I am not without some sympathy. If a luxury home is the only home that a person has, and if that person can no longer afford to make the mortgage payments as a result of a reduced income level, then the person’s distress is understandable. After all, the person may have to move out of the home and may not have enough cash on hand to pay for another home or (Gasp!) an apartment.
If the HO has had a job transfer to another part of the nation (or world), then it is understandable if the HO doesn’t want to sell the home for less than the HO paid for it.
Yet, such scenarios are not mentioned in the aforementioned new story. Instead, the story talks about luxury homes that have a market value less than what their owners paid for them.
So, please don’t tell me about the “shattered dreams” of people who have been living luxuriously. I have enough shattered dreams of my own, and they don’t pertain to living in luxury.
