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I am sort of pondering over this ever since early fall last year.
We bought our house June 2005, approximately 2 yrs before the local bubble burst. EVERYONE told us that we had it for good price, at $440 000.
And here I am.
THERE is your answer.
The bubble has not quite returned yet to "full pre-buble value", let alone "added value". At least not in all areas of the country.
Real estate is about location, first and foremost.
There are old houses worth far more than new houses because of their location. And vice versa.
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Originally Posted by mathjak107
funny how folks get it in their heads an old used house should be worth more as time goes on but everything else in life except collectables is worth less as we use it..
Historically, home prices have always returned to the median growth in housing values across the decades. But as mentioned, real estate is all about location and I'm old enough to have watched certain areas rapidly appreciate and remain highly sought after regardless of the housing collapse, while other areas have steadily declined in value. And it's not always the obvious. Where I live (in Baltimore) some of the suburbs that were popular and commanded in high prices in the 1990s have housing prices that are comparable to their 1990s prices, or only marginally higher. Other suburbs that were considered expensive in the 1970s-80s, while still perfectly fine places, have not seen the appreciation of other expensive suburbs. Certain suburbs that were considered ordinary in the 1980s are now very expensive.
Trying to predict real estate trends is always going to be a mystifying game.
We bought our house June 2005, approximately 2 yrs before the local bubble burst. EVERYONE told us that we had it for good price, at $440 000. Not just realtor, EVERYBODY, friends included.
Then it was probably a good price for the conditions under which you purchased it.
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Where's promised "average 6% year growth"?
You've already been beaten up over this so no sense piling on.
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What am I missing in the grand scheme of things?
Have you enjoyed living in your house the past 10 years?
funny how folks get it in their heads an old used house should be worth more as time goes on but everything else in life except collectables is worth less as we use it..
The collectible market collapsed long ago, except for high end art. I know a couple with a room full of beanie babies. They were saving for retirement.
Real estate is about location, first and foremost.
There are old houses worth far more than new houses because of their location. And vice versa.
Historically, home prices have always returned to the median growth in housing values across the decades. But as mentioned, real estate is all about location and I'm old enough to have watched certain areas rapidly appreciate and remain highly sought after regardless of the housing collapse, while other areas have steadily declined in value. And it's not always the obvious. Where I live (in Baltimore) some of the suburbs that were popular and commanded in high prices in the 1990s have housing prices that are comparable to their 1990s prices, or only marginally higher. Other suburbs that were considered expensive in the 1970s-80s, while still perfectly fine places, have not seen the appreciation of other expensive suburbs. Certain suburbs that were considered ordinary in the 1980s are now very expensive.
Trying to predict real estate trends is always going to be a mystifying game.
Housing prices in any given neighborhood gravitate toward 3.5x the median family income in that area. If high rollers move in, the price goes up. If they move out, the price goes down. You can get demographic data for an area fairly easily, and can predict the probable results of a real estate investment from that.
Housing prices in any given neighborhood gravitate toward 3.5x the median family income in that area.
In days past, when people in the lower quintiles earned better, that ratio was more commonly
in the 2-2.5x range in most of the US and only rarely topped out above 3x.
Population growth makes bedrooms more valuable.
You can thank the banksters and Wall Street gangsters for the housing bubble burst of 2008. It's all a house of cards, my friend (no pun intended). Unless we can reform banks/Wall Street, it can and will happen again. This last crash of 2008 (and the foreclosures that followed) wiped out many homeowners' home equity. It's a rigged game. No guarantees.
If it appraised for $440,000, why in the world do you think you can sell it for $480,000??
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Just say no
