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I have heard, on average, a homes value will increase 3-5 % per year. So, if that's the case and I do the math, here's what I get:
Home is valued at $160,000 now. Each year it may make a positive gain of $6,400. That means to at least reach $200K again, it will take at least 5 years.
They are predicting home values to drop more, so it doesn't sound good. It really is frustrating. I wish I lived in one of the areas that didn't go through the boom. At least areas that weren't affected only may have seen a drop of $10-$20K, not $100K.
All we can do is hope for the best and ride the storm out. The real estate market is cyclic IMHO and it will turn around again as it always does. Question is, when will it happen?
That is the million dollar question. I think 5 years is probably a good guesstimate. In my new neighborhood, using only one house as an example, the people paid $267,000 back in '03 sold it at a loss in the 230's recently. Their tax assessment in '08 was $275,000 (a joke) and was immediantly changed to what the new people just paid. They were one of the first built in the subdivision though, so already a little dated at 6 years old. If you don't have to sell stay put.
If you look to prior regionalized real estate busts, it took almost a decade for homes to begin to appreciate, again.
The Japan real estate market recovery has protracted into its 18th year, I think. Likely, some areas in Japan have fared better than others.
So called "normal' home value appreciation is fairly tied to inflation.
Recovery is a function of the amount of unsold inventory in any local market.
There are plenty of areas in the U.S. that did not experience anything other than so-called normal appreciation, during the bubble and yet they have been impacted by the downturn.
I would be surprised if there is anyplace in the U.S. that has maintained home values over the past 3-4 years.
Sellers who do not need to sell and refuse to sell at what the market will bear, can contribute to the recovery and withdraw their home, from the market.
Sellers who do not need to sell and refuse to sell at what the market will bear, can contribute to the recovery and withdraw their home, from the market.[/quote]
This is the reason we took our house off the market 2 months ago. We are going to wait until the market recovers.
I think it will be a while. First it will just take a while for the economy to right itself. Then once that happens there is the added problem of the boomers. At least out here, we have many "summer birds." They spend summers and falls here and then head to FL or AZ for winter. Having two homes to sell when they starting to die is going to create additional strain on the market in the future. We have a demographics problem in the US in that the boomers are the largest generation...some of which own more than one home.
So I imagine things will stagnate for a while, then recover a bit, then probably stagnate again in the world of real estate. That's my best guess looking at my crystal ball without any coffee this morning.
Sellers who do not need to sell and refuse to sell at what the market will bear, can contribute to the recovery and withdraw their home, from the market.
This is the reason we took our house off the market 2 months ago. We are going to wait until the market recovers.[/quote]
Thanks for doing what you could to contribute to the recovery.
If everyone else in the same boat, bit the buller and stayed put, like you, it would clear the way for distressed sales and likely contribute stabilizing markets.
The one thing that will always turn it around is that with new starts droppig so much;that housing will become short eventially. That and the price of materials is not dropping or likely to in the long run.Hopefully its not infalted like the recent past but it will gain as people want housing and with savings going up many will be in much better position.Alsao if we see a population shift like in the 70's ecession 'its likely some areas will boom in housing.
Then once that happens there is the added problem of the boomers. At least out here, we have many "summer birds." They spend summers and falls here and then head to FL or AZ for winter. Having two homes to sell when they starting to die is going to create additional strain on the market in the future. We have a demographics problem in the US in that the boomers are the largest generation...some of which own more than one home.
The boomer birth years are 1946-1964, I think.
The first boomers will turn 65, in 2011. The last will do so, in 2029.
I have read ( certainly don't know) that despite what the media tells us, the majority of retirees do not become sun/snow birds or pack up and move. Instead they trend to stay put and remain close to their families.
The first boomers will turn 65, in 2011. The last will do so, in 2029.
I have read ( certainly don't know) that despite what the media tells us, the majority of retirees do not become sun/snow birds or pack up and move. Instead they trend to stay put and remain close to their families.
Yes I was recently reading an article that said 50% of boomers are concentrated in like 7 states or something. I know when I lived in Illinois, I had never heard of a "snowbird" before. I think boomers in Illinois stay put. The seasonal migration thing seems to be more of a west coast thing.
I have heard, on average, a homes value will increase 3-5 % per year. Question is, when will it happen?
The answer as to when this will happen is very simple; when demand out-strips supply... The answer to when that will happen will depend on where you live.
The laws of supply and demand will always determine market price no matter whether your selling homes, hot dogs, cars or widgets.
When you have 600 active home listings in a certain area and only 60 active buyers looking, you can hopefully see what's going to happen to prices. Right now investors are gobbling up most of the shorts and foreclosues so I would say that the areas that filter out those first will start to rebound first.
A lot of this also has to do with the creidt markets... As another poster already said, even areas that didn't boom are feeling the effects of this RE downturn, mostly because of the foreclosures that are being generated from the loans that were given to those who should have never had one in the first place.
But as usual the government and banks have a knee jerk reaction to the problem; they give loans to anyone with a heart beat for years to create this problem, now they have gone in the other extreme of under lending. Kind of like closing the barn door after all the animals have run out.
Until the shorts & foreclosures cycle through and the credit markets loosen up a bit, it will be impossible for the market to rebound.
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