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MAY 7, 2007
Chicago Blues When I bought my first home in 2005, I did everything right, from studiously researching the neighborhood to boning up on adjustable and fixed-rate mortgages. I even haggled with the sellers, knocking $4,500 off the list price and getting window treatments thrown in. All of those smart moves won't save me from taking a loss, though. Like many homeowners across the country, I'm a victim of circumstance. I bought almost at the peak, spending $240,000 on a two-bedroom condo in the trendy Chicago area of Lakeview. Then, earlier this year, BusinessWeek transferred me back to New York. As with many people in my predicament, I never figured I would have to move so soon. It has been a tough four months since I first put the condo on the market, a situation compounded by a dreary Chicago winter that made home sales there especially slow. I'm thankful that I found a buyer, and the deal is set to close at the end of May. It's happening just in time: I'm reaching the end of the goodwill with my New York friends, who have been putting me up in their apartments. In a sense, I've been homeless, unwilling to rent a place in New York until I've taken care of business in Chicago. I'm suffering a big hit on the condo. My situation is known as an "underwater" sale, meaning my selling price came up short of what I owe on the mortgage. The median home price in the Midwest fell just 0.2% over the past year, but my condo will fetch $234,000, a 2.5% loss. Plus, I'm ponying up $2,400 worth of incentives for the buyer, and I recently paid $1,600 for new stainless steel appliances to help sell the apartment. Counting commissions, closings costs, and all the rest, I'll be out roughly $20,000. Most of that is coming straight out of my pocket. Uncle Sam won't offer any solace: Because of long-standing tax rules, I won't be able to write off the loss from the sale of my home, as I could for stocks and bonds. I remember vividly the pride I felt on the first night in my new place. Now the experience conjures up anxiety, restlessness, and regret. It'll be a long time before I jump back into real estate. But at least, as I've reminded myself during the darker days of this ordeal, I love my job.  By Adrienne Carter Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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