This is just pissing me off to no end.. we're trying to sell our place so we can head overseas, but no luck so far.
We bought a house that we could easily afford back in 2002. Meanwhile, people around us were loading up on larger places with creative (ARM, interest only etc) loans and could barely afford them. We bought cheap cars we could easily afford. Meanwhile, people around us used the equity in their now value inflated homes to buy Lexuses. Builders threw up new subdivisions all around us, with houses going for more than twice what we paid.
Fast forward a few years...
The builders have gone bankrupt, leaving half finished subdivisions behind.
The banks are firesaling the houses, so those previously 400k+ homes can now be bought for half that.
The people who lived paycheck to paycheck and had a lifestyle they couldn't reasonably support are now crashing financially, and foreclosures are popping up everywhere.
Home values are now around 30% lower than they were in _2002_ in the area.
We tried to be responsible and do the right thing, and here we are getting screwed. I'm betting quite a few of the overspending, overconsuming people walking away from their homes will end up taking less of a hit on the books than we are.
It just isn't fun.