Is my house completely worthless yet?

So for the last few months, I've been under the illusion that my house was worth something. Sure, if I had to sell it, I probably wouldn't get back what I paid, but maybe I'd at least get back what I owe - maybe I'd be able to walk away losing my down payment, but not having to bring a check to closing.

After some playing with Zillow, though, I'm not even sure about that. I'm pretty sure that I'm upside-down on Casa De Mad, which makes it difficult to make any major life changes.

I debated if I should use real numbers in this post or if I should just use percents. In the end, I decided to use real numbers - anyone can look this information up online if they know where to look (here, here and here if you didn't before).

I bought Casa De Mad in June of 2006. It's a 2-bedroom, 1200 square foot, center unit split-foyer townhouse in Nottingham, MD, a Baltimore City suburb commonly referred to as "White Marsh". I paid $214,900 for it but got $4400 back at closing from the seller. I did a 10% down, 40 year mortgage, so I owed ~$193,000 when I bought it, and since then probably about $2000 of my mortgage payments have actually gone to principle.

I've been following home sales and comps and for the most part they have been pretty good - one sold for $208k, but had some curb appeal issues, but most of the houses in my 'hood were going for well above what I paid - some as high as ~$240k, but these were bigger and one was an end-of-group.

But I noticed something disturbing recently. Zillow shows a house in my development selling for $195k. Even worse, if I look it up on the MD tax site, it shows the $195k sale - and then two months later, a second sale for $188k, with the seller being listed as a bank. On the plus side, Zillow does also show another home on another court (which I think is similar to mine and is the same square footage) that sold for $226k in January (which I think is actually above list - I could have sworn I remember seeing it listed at $219k).

But the current market is grimmer. There are two homes currently in the market in my 96 unit development. One is a very nice one a few doors down from mine, which has been on the market a couple times since fall. It was listed at $245k and has since dropped down to $229k with no takers. Another one, which has also been on the market for a few months, is listed at $249.5k (down from $254k). It has a ton of improvements, including new oak cabinets and stainless steel appliances in the kitchen.

My house, on the other hand, has dark 70's cabinets, a master bathroom that looks like an 80's porno set, and a ton of little and big things I haven't gotten around to fixing. If I listed it, it would not "show well", as realtors say.

So my only real option (besides mailing the keys to the bank and watching my credit score plunge) is to wait it out. After all, homes are long-term investments and I shouldn't be thinking about leaving.

But I've been considering a career change. Years ago, before I got my current job, when I was an unemployed recent college grad, I was planning on going to law school, until this job came along. Now that I'm less than happy with where my career is going, where my life in general is going, and wondering if it may be time to consider law school again. But being tied to the house limits my flexibility to do that. That isn't to say I can't - both University of Maryland and University of Baltimore offer part-time programs, so I could get my law degree at night, assuming I could get in (UBalt probably wouldn't be a problem, UMD would be tough). And I'd have a shitload of debt if I go this route.

I bought a house for a lot of reasons, most of them the wrong ones. It seemed like the responsible thing to do. It seemed like a chance to prove myself, to prove that I could financially make it on my own, buying a house at 25 with no help from the 'rents. I figured it would act as a signaling mechanism to women that I was a financially responsible guy looking to settle down. None of that really happened. About the only good thing that has come out of owning a house is that it's let me can has a kitty.

So I need to make up my mind pretty soon if I want to start studying and registering for the LSAT (which I would need to take in October if I want to start class in Sept 2008). I hope I make a better decision than I did when I bought this house.