Property Values

We bought our current house at near the peak of housing prices. We settled on a purchase price around $180k, and felt that we had an ok deal. We made the mistake of getting too attached (and desperate to settle, after being unable to find something that met all our criteria but was still in our price range!), so we felt that we had overpaid slightly, but we made that tradeoff when we placed our final offer. 

Three years later, our house is valued somewhere around $145k, a drop of $35k (almost -20%). It means that we're upside-down on our mortgage, and we're pretty much locked in to a house that we can't afford to sell. We'd love to "move up" into a bigger nicer home, but we wouldn't be able to come up with the difference on what we owe, much less a down payment on the new house. So we're stuck where we are, and we're trying to make the best of it. 

Although the entire state has suffered some pretty significant drops in property values, I knew that where we live hasn't been hit as badly as others. For curiosity's sake, I decided to check and see how it's affected property values of some of our friends and family who live nearby. 

One couple we know paid $140k in 2003, and their house is now worth $120k (-14%).  Another couple paid $95k in 2004, and their house is now worth $45k (-47%). And yet another paid $265k in 2005, and their house is now worth $215k (-19%). 

It definitely sucks that values have dropped so much, but it's oddly reassuring to know that so many people we know are in the same situation. We've lost a lot of money on this house (if we were to sell it now), and especially if we include the money that we've put into repairs & improvements (not even talking about mortgage interest and property taxes!), but it could be worse. I'm sure that we'll end up taking a loss when we move (because we don't plan to stay put for more than a few years), but hopefully we will get enough to at least pay off our mortgage when we do finally sell.