What about property value?

Question

In my area the property value has skyrocketed in the past year or so. A friend bought his 1400 sq. ft. home for $130,000 three years ago, today it is worth $300,000.

Will this top off and property values head back down?

There is a lot of building going on around here, because of this I think the values will continue going up, so I want to buy now, but don't want to lose my shirt when/if the property values go down.

Answer 1

It depends where you live - Try these articles from CNN Money:

http://money.cnn.com/2006/05/15/real_estate/NAR_firstQ2005_home_prices/index.htm

http://money.cnn.com/2006/05/12/real_estate/reguide_moneymag_whatsnext_0606/index.htm

They have great information for most markets in the country.

Answer 2

Buy your house for its use, not its investment potential. If you plan on staying in your home for more than 10 years, historically, almost everyone realizes market appreciation within 10 years.

The current sages say the housing market will slowly level off. Residential real estate, especially single family homes, rarely loses value for long periods of time (2 or more years). The reason is simple. Potential sellers will wait for the market to improve, if they can, before selling into a loss and continued debt from the sold home. Residential home owners cannot absorb such loses, like a factory or office building can.

So, like any buyer, buy what you really want and can afford. Then, hold your breath.

Answer 3

This has seemed to be the trend in my particular area as well, my own homes' assessed value rose $68k in the past two years alone.

However, more building going on in the area, doesn't necessarily relate to increased cost to own. By building more there is more supply for buyers to choose from, which forces sellers to be more competitive with their pricing. With interest rates steady, but increasing slowly, there may be a bubble in the future. I don't have a crystal ball to read the future.

Now is as good a time as any to purchase a home in my opinion, if you plan on staying with the property for the long haul.

Answer 4

If you're renting, then buy your own place. Even if the market goes down, it will eventually go back up within 7-10 years. Also, the replacement cost of homes don't go down, so you won't lose your shirt too much if you can't hold on to a property for at least 7 years.

If you're in Southern California, check out my website to search MLS for free and view our money back program using our services.

Regards

Answer 5

It is estimated that a lot of property is over valued right now. If interest rates continue to go up, prices will have to go down.

Answer 6

value hardly ever decrease only level out