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When do you think the housing markets will come back down to normal? My home is worth much more…?

28 May 2009

28 May, 2009  Pricing

than when I bought it in '99, but it was worth so much more just a few years ago. I'd like to sell, but it wouldnt sell for what I want, as I put much into it. Is it better to sell now or wait until the market stabilizes, whenever that will be?

wait unless you have to move. your house is first and foremost a dwelling, and only secondarily an investment. the thinking that the house is "the largest investment you'll ever own" is what created our current housing crisis. It's a place to live. It happens to appreciate in value over time, most of the time.

I believe that the housing prices have returned to "normal" — if your house appreciated between 3-5% annually from the day you bought it to today, then it's at its fair value. More than that (i.e. the 10-15% increases we saw) is unsustainable and prone to "crash"

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4 Responses

  1. DffrncMkr

    2009 May 28 1

    wait unless you have to move. your house is first and foremost a dwelling, and only secondarily an investment. the thinking that the house is "the largest investment you'll ever own" is what created our current housing crisis. It's a place to live. It happens to appreciate in value over time, most of the time.

    I believe that the housing prices have returned to "normal" — if your house appreciated between 3-5% annually from the day you bought it to today, then it's at its fair value. More than that (i.e. the 10-15% increases we saw) is unsustainable and prone to "crash"
    References :

  2. Wickerman

    2009 May 28 2

    It's remarkable that nobody points out that houses are influenced by supply and demand - just like everything else. House prices in the UK for example were high because it's very difficult to get 'planning permission' to build them. As a result mortgage brokers rode on the back of the so called boom, telling everyone that their houses were 'worth' far more than they cost to build, that's clearly nonsense. Property prices will reach equilibrium again when the they reflect the true cost of building them ( plus the cost of plot - prices of which are also hyped by lack of 'permissions'). I reckon three to four years maybe, they have to about half in price from their 'boom' values of two years back. Incidentally this is exactly what has caused the so called credit crunch - people have spent the money that they thought their houses were worth using plastic, bad news.
    References :

  3. Alterfemego

    2009 May 28 3

    Unless you Absolutely have to sell, I would wait. Everyone has lost considerable value in their homes, some are now upside down in loans due to this economic situation. And values are not likely to increase significantly and/or quickly again. I would sit tight for a couple more years if you can.
    References :
    Realtor

  4. Ed Atun

    2009 May 28 4

    No one predicted the realty boom of 2004. No one warned us that the bust would hit in 2006. And no one predicted that 2008 would be a nightmare. You could wait and find that things keep getting worse for 5 more years. The last recession in 1987 lasted 4 and 1/2 years. Or the new President might lower interest rates to 3% for 30 years and spark a realty boom next year. So the answer is that no one knows when "normal" will return..
    References :


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