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Hey guys,,ive been searching how much prices have changed in the last 20 years; yeah, pretty crazy!
Lets say my home value is worth 200,000. Do you think its a 100% guarantee it will go up like it did 20 years ago?
Or we pretty much hit a settle down point for the next 10 - 20 years. I know in 2015-2016 prices are calmed. But seems to be a trend every 5 years where it will just shoot up as population continues to rise
Like anything else, it's all about supply and demand depending on where you live. The more popular the area, the faster the prices go up. It's really that simple.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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This is how you avoid being under water and foreclosures - stay in the house 20+ years. We paid $199,000 in 1993, and at the peak before the crash it was worth $674k. The lowest it went in 2009 was $400k, still double the purchase price. Now it's back above the peak at $680k. Someone that bought in 2010 has made a lot of equity in a short time, but it's a gamble, people that bought in 2005-2007 had the opposite results.
Markets are cyclical and unless you have a crystal ball, the best you can say is that what happened in the past might be an indication of what could happen in the future. I'm an agent and certainly hopeful that my property and my customer's properties will continue to increase in value but it would be foolish to assume that it is "a lock."
This is how you avoid being under water and foreclosures - stay in the house 20+ years. We paid $199,000 in 1993, and at the peak before the crash it was worth $674k. The lowest it went in 2009 was $400k, still double the purchase price. Now it's back above the peak at $680k. Someone that bought in 2010 has made a lot of equity in a short time, but it's a gamble, people that bought in 2005-2007 had the opposite results.
I never understood the concept of walking away from your house simply because of being underwater. I might see it if you are in a forced to sell situation (relocation, death in family, etc etc) but back in 2009 I did see people simply stop paying the mortgage simply because their house went from $500K to $350K and they owed $450K. Had they kept paying the mortgage anyway, that house would be worth $550-600K today.
I never understood the concept of walking away from your house simply because of being underwater. I might see it if you are in a forced to sell situation (relocation, death in family, etc etc) but back in 2009 I did see people simply stop paying the mortgage simply because their house went from $500K to $350K and they owed $450K. Had they kept paying the mortgage anyway, that house would be worth $550-600K today.
It really doesn't make sense, if you can afford it which you should unless you got a scam loan, which some people do, the value of your home shouldn't matter. An underwater home that you plan to live in for the next 15 years or so will not be underwater by then.
I never understood the concept of walking away from your house simply because of being underwater. I might see it if you are in a forced to sell situation (relocation, death in family, etc etc) but back in 2009 I did see people simply stop paying the mortgage simply because their house went from $500K to $350K and they owed $450K. Had they kept paying the mortgage anyway, that house would be worth $550-600K today.
Depending on the local laws, it was a good deal for some. I know one family that borrowed against their primary residence at the peak, mortgaging it for $850K then bought a fixer upper for $400K cash. After that they maxed out their credit cards renovating the fixer and let the other house go back to the bank. They now have a fully renovated $750K house owned free and clear after declaring bankruptcy. Exactly how they managed to do that legally is somewhat complicated, but I know others who pulled similar stunts and ended up with a substantial amount of equity as a result of walking away. Others managed to roll in a bunch of consumer debt and student loans to the mortgage and have it discharged - something that you normally can't do with student loans.
As for the houses going back up in value, that hasn't been the case in most areas. Additionally, many were stuck with mortgage payments nearly double the rent and could not refinance with negative equity. In those cases it's not just that the house price went down but that they were paying thousands extra every month and watching the money disappear into a black hole. 10+ years of negative equity on top of $1,000+ more a month wasn't just a loss on paper, it was real money paid out every month.
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