| 11/07/2008 - Well, this is my second month using this site. I think I am going to start writing more from now on.
Last month was about as ugly as it gets. We lost just over $30k for the month of October - a 13% drop if you take Real Estate out of the equation. Not good.
But as luck should have it, we were finally able to get rid of our second house. To give a little background, my wife owned half of a two family house with her sister. After we got married in 2004 we bought another house and rented my wife's half of the two family. We pretty much broke even while we were renting it, but really we've wanted to sell off my wife's half since the day we moved out. My wife bought the house with her sister back in 1997, so even with the ugly housing market there was still a fair amount of equity.
After several years of arm twisting and a half dozen proposals, my wife was able to sell her half of the house to her sister. The sale resulted in a nice cash infusion of $72k - helping to offset the ugly market downturn.
We put 65k of the proceeds into Vanguard's Ginnie Mae fund (VFIIX), and 5k into their Total Stock Market fund (VTSMX). We will probably spend about half of this money over the next year or two on some home improvements, a vacation, and a big tax bill.
The proceeds will also serve as a nice emergency reserve. I recently survived the 5th round of layoffs since I've been with my company. Given the state of the economy I'd say that another one will probably happen in January. I've been lucky so far, but the way things are right now nothing is certain.
11/14/2008 - I've tweeked the value of our Home to reflect what it's really worth instead of valuing it at the price we bought it for. I went onto Zillow and pulled up a chart that showed our home's value over the past 5 years. I then interpolated the values as best I could - taking a sample each year for January and July.
Moving forward I will keep doing that - updating our home's value every six months.
Sadly, this exercise added more gloom and doom to what was already a ugly situation. There are currently 134 foreclosed properties in the city I live in, many of those foreclosures are within a mile of our house. This is certainly a part of the reason my house value has been dropping. Sadly, the drop has really accelerated over the past year. I'm guessing my house value will be around $230,000 when I update the figures in January.
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