Monday, October 02, 2006

Soooo close!

My net worth is about $298,000 right now. I never expected to break $300,000 this year, and if I do it will only be briefly, I think, as I hope to be closing on the condo in the next month, and the closing costs will take a big bite out of my cash.
I just wish I had internet access at home so I could update all my security prices in Quicken and see my real net worth on the screen instead of having to manually add it up these last few months!
It's funny to fixate on these little milestones, as the ups and downs of the market can make them so fleeting, but still, it feels good when you can see the meter ticking...

6 comments:

Asset gatherer said...

Because you bought a condo pre-construction, you'll probably have some instant equity. So, while you're spending cash to close on the property, your net worth will be helped with equity.

Anonymous said...

It appears that the days of "instant equity" are pretty much over.

enoughwealth@yahoo.com said...

Hmmm... perhaps "instant negative equity"?

How are you going to monitor your real estate equity? I use the median price data available for houses in my suburb (updated each month) to estimate the value of my properties, based on what multiple of the median price the property cost. This, and your mortgage loan balance, lets me get a good estimate of my real estate equity each month.

Some other bloggers exclude their own home from their net worth calculations, as "you have to live somewhere". This is also reasonable, but makes it impossible to compare your net worth as a renter to that when you become an owner. Plus, you may be able to release some of that equity later on if you downsize or move to a region with cheaper housing, so it is part of your net worth.

Regards
http://enoughwealth.blogspot.com

Madame X said...

True, I don't think I'll have too much instant equity. I will factor in recent sales in the area to see how costs per square foot are trending, and the appraised value, and some of the closing costs that only apply to a purchase of new construction that would presumably lead to the selling price being a bit higher on a resale. I think all of that will lead to a value of slightly more than I am paying, but only very slightly more. And a year from now I could be revising it downward. But I am only financing 80% of the purchase price, with a fixed-rate loan, so I am pretty confident that prices won't go down enough for me to truly have negative equity.

Hazzard said...

I completely agree that it's nice to watch the meter. I've seen the swings in the market lower my net worth and then raise it up nicely. Back and forth.

But it's nice to see it trend upwards. I keep a historical, month by month view of our net worth so that I can see the balances at each point in time. It sure makes me feel good to see it going up over time, even with the hiccups of the market!

Anonymous said...

I don't recall the details of your home purchase (if you've mentioned it). However, I'd suggest that you game the possibility that you will have negative equity despite the 20% down payment. Prices are coming down pretty quickly. For example, in just the last quarter, coops lost 16% of their value. See: http://www.nypost.com/seven/10042006/realestate/n_y__crah_pads_realestate_braden_keil.htm