by Tanta on 10/01/2007 09:52:00 AM

I thought we'd take a moment for philosophical reflection on this bright sunny Monday morning. What is "a loss"? If an accountant bangs her head against the desk in a deserted office, does anyone hear the sound?

Our text today is "Owners face selling at a loss now that the housing bubble has burst." The owners in question are currently marketing their home for $868,000, even though--alas!--it was valued by a real estate broker 18 months ago at $930,000. Another distressing story of borrowers upside down on their mortgage, forced into the horrors of the short sale? Well, not quite.

The Bellomos' house is sited on the edge of the wetlands. The large picture window on the second story overlooks acres of wetlands filled with egrets and other wildlife. Barker said his firm has put a value of $40,000 to $50,000 on the view but said he couldn't value the home because he's unfamiliar with it.

When the Bellomos bought their house on Wetlands Edge Drive in 2002, the market was so hot that they took time off from work to drive up from the Peninsula on a Friday morning. They nabbed one of the last houses in the development with a view of the wetlands. They paid $424,000. Because they had no children, the Bellomos bought the 3,300 square-foot, four-bedroom, 41/2-bath home for themselves, their cats Felicia and Felix, and for the many family members who visit often.

From the outside, the home is similar to many on the block: a large, nondescript house on a smallish lot. But inside, the house is large and stately. The Bellomos put considerable work and money into making it that way. They upgraded cabinets and added granite in the kitchen, placed an inlay in the foyer's hardwood floor and added marble and granite slabs in the bathrooms.

Saverio Bellomo got his dream library-study with built-in cabinets and the couple added expensive Venetian plaster to many of the walls in the house. The same high-end cabinets and granite countertops used in the kitchen were installed in the laundry room. Every closet got a built-in closet organizer. New built-up baseboard and crown moulding was installed throughout the house.

The trouble is, upgrades for one family are renovations waiting to happen for another family, Barker said. For instance, the Napa Valley school district is a huge draw for many home buyers in American Canyon. But the Bellomos have converted two rooms to an office and a library, respectively - with built-in cabinets. For many potential buyers these would be kids' bedrooms.

The Bellomos declined to say how much they paid to make the renovations but admitted that even if the house fetches full price they won't break even.

These people put more than $444,000 in luxury "improvements" into the home over five years? That's some serious granite.

Fortunately, the Bellomos are taking this well:

They braced themselves for the financial loss. But they are also looking at it positively. "We're trying to be Zen about it," Robinson Bellomo said. "This is the market we have here. Hopefully, the market in Albuquerque will be the same and the real estate gods will be good to us, too. In the meantime, the home buyer is going to get an incredible value."

You crazy Californians.