Falling home values in South Florida - there's no bottom in sight

This is really disconcerting. Our neighbours just sold their home for half of what we owe on our house. When inflation is taken into account, the home has now sold for half of what it was sold for 14 years ago - brand new.

That means, we are now 100% underwater on our mortgage. Many calls to our mortgage company have fallen on deaf ears, even as my income has been slashed. I still earn too much and thus they will not help me.

So many homeowners are simply walking away here in South Florida. On our cul-de-sac, there's already one unoccupied home. Right now, the lawn and landscape is being maintained - who knows by whom, so at least its not looking bad, but it has a pool in the backyard, who knows whats breeding in there now ? As more and more homes are foreclosing, who knows what will happen to our HOA fees, it must go up eventually to make up for the loss of income.

Recently, our HOA sent every home owner a referendum form, to define how many people may live in a home - as people are leaving their homes, or short-selling, the prices have dropped 100% since 3 years ago, it has now become affordable for many people and more and more renters and people of questionable character are moving in, sometimes 5 cars or more line the streets in front of these homes, making driving and parking difficult for everyone else and looking unsightly. When you drive through the neighbourhood, those are also the houses with unkempt lawns and gardens, very often with no window treatments, or cardboard boxes in front of windows. So they want to make it HOA law, that only one family may live in a home, and also a maximum of 2 people per room. Also, you may have family live with you temporarily, but you must prove that it is direct family.

My mistake was simply buying the best house I could afford at the wrong time. Granted, I would be hard pressed to find a home with such a large garden anywhere within suburbia, but looking at realtor.com and others, there are now newer, more beautiful homes with 1.25 - 1.5 acre lots selling for half what I owe on mine. The original allure of this house was the large lot. It has been my dream to have a large garden as long as I can remember. I have also invested so must sweat and hard labour here.

Florida is a recourse state - that means if the mortgage company sells the home at an auction for less than what you owe, they can come after you for up to 20 years and get a deficiency judgement against you. That means, you are simply screwed, there seems to be no way out of this.

This leaves me the question, as a responsible law-abiding citizen, what am I supposed to do ? Do I simply walk away and face the danger of getting a deficiency judgment against me, should I try to do a short sale, but will the mortgage company settle for 50c on the dollar, or do I continue sinking my hard-earned money into this bottomless pit - according to youwalkaway.com, it will take 104 years to recover my equity !

See here how your home measures up: http://www.youwalkaway.com/output24/InterectiveFlashCalculator.html