If you can't sell your home because property values have tanked, you're a member of a very big club.
Recent studies estimate between a quarter and third of all American homeowners are underwater on their mortgage, meaning they owe more than their home is worth.
That’s a lot of folks waiting for a big housing market bounce.
I’m one of those people.
I bought a condo when I was single at a good price in a prime neighborhood, with a plan to update it and flip it in a couple of years.
After seven years, I'm still here.
The place is fixed up, but I missed the window of opportunity when condos in my building — including a similarly sized unit across the hall — were going for $80,000 more than I paid.
According to Zillow.com, the place is now worth $24,120 less than what I paid for it in 2005.
And now I’m married and sharing a smallish space with my husband and all of his stuff. And two dogs.
But I’m doing what thousands of other homeowners are doing while playing the waiting game: Making the most of being stuck in my home through smart moves like these:
Smart move 1. Take advantage of low interest rates.
If you can't move, refinance, especially if you can cut your interest rate by a percentage point or more. Mortgage rates remain near record lows, a trend that the Federal Reserve is dedicated to continuing.
You could save thousands of dollars while you wait to put your home on the market — money you can use to either pay down your current mortgage or save for the down payment on your house.
Our refinancing calculator will show you how much your payment will decrease as well as how long it will take to recoup fees and closing costs.
You generally want that to be a year or less, but also factor in how long you think you’ll be in your house.
And just because your home is underwater doesn't mean you can't take advantage of these historically low rates. Under the government's Home Affordable Refinance Program, homeowners can refinance a first mortgage no matter how much the value of their property has declined.
Of course, this program isn't available to everyone.
For example, I can't take advantage of HARP because my home loan isn't owned by one of the two big government-owned firms that finance a majority of today's mortgages, Fannie Mae and Freddie Mac
Smart move 2. Take your home out of neutral.
If you’ve tried to sell, your real estate agent probably recommended you strip your home of anything too personal and paint the walls a neutral color.
If beige walls are making you blue, brighten them with hues less drab. Put out family photos. Clutter your kitchen countertops.
Enjoy living in your home. Don’t just bide your time until the market rebounds.
Smart move 3. Improve your neighborhood.
I’ve been a member of my condo association’s board of directors for much of my time here. A friend once said that it was “the least amount of fun you’ll ever have.” She was right.
Still, it has served an important purpose: I've been able to see where my association dues go every month and been involved in making decisions on building upgrades and maintenance — important items that could help the property increase in value.
Not everyone lives in a condo, but everyone can get involved to facilitate change. Join a neighborhood association or lobby your municipality for upgrades.
Unhappy with the school your children attend? Volunteer for a committee or run for the school board.
Smart move 4. Fix 'er up.
You can always make your home nicer, and more livable, and perhaps even easier to sell down the line.
Of course, you won’t recoup all of the costs of a home improvement project, so you’ll want to choose your project and decide how much to spend carefully.
If your goal is to increase your property value, make sure your project reflects the neighborhood. In other words, add a bathroom if your home lacks the second bathroom all of your neighbors have.
Smart move 5. Become a landlord.
While it’s not easy to meet lender requirements, you may be able to rent out your home and still qualify for a mortgage on a new home.
This means you’ll be a landlord, a role that shouldn’t be taken lightly.
You’ll want to call a lender to discuss if this is possible based on your equity and reserves, before sticking a "for rent" sign in the front lawn.
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