Is a house worth from one year to the next say from 2.2 million to 2.9 million just cause the seller think so?

Question

A.) yes it is worth more because 2.9 million is obviosly worth more than 2.2 million?

B.) No it is the same value because nothing changed with the property from one year to the next, the seller is price gouging.

C. ) the house is actually worth less amount because it takes more greenbacks to actually buy it?

D.) I have no clue why house prices change.

E.) other concept please explain?

Answer 1

The price of a house, or anything else on the free market, is governed by it's value in the eyes of the buyer. Let me explain using another example:

The wood that is used to make a guitar has pretty minimal value. If the person who then builds that guitar is a fine craftsman who also built a guitar for Jimmy Hendrix, then the guitar will have greater value. However, suppose the guitar built is made in china via multiple machines and several child laborers. Will the guitar have the same value? Of course not. However, suppose that this $100 dollar guitar is signed by Eddie Van Halen at the very last concert before he retires, and he includes the date. Immediately, that $100 dollar guitar becomes worth thousands. Why? Because someone now sees it as special and is willing to pay more for it.

Houses are the same, as is any item of tangible worth, or any commodity. They all have a certain value in the market place.
Factors that effect these values:

1. Location: If the house is in Beverly Hills, and your next door neighbor will be Jack Nickelson, then the value is greater. If the same house is built in the heart of a poor area of Mississippi and your neighbors regularly show up on the TV show "COPs" then the value will be MUCH less.

2. Market: If the Dow is up to an all time high, and the housing market is booming during a time of economic prosperity, then all houses will likely rise, since people have the money to buy.

3. Demand: If an area is growing rapidly and buyers far outstrip sellers, the price will be much higher.

4. Special qualities: If the house you are going to buy was once owned by President George Washington, and has been designated a historic landmark, that property will likely be much more expensive.

I hope this clears things up, as it is the way the value/price of all things occur in the world, unless the government messing things up by regulating their price.

Answer 2

I would have to go with E say that only appraiser can give you a closer range of the worth of the house. I mean even then if you got 4 different appraisers you would get 4 different totals. A house if only worth as much as your willing to pay for it. A 700,000 appreciation in one year without any major add on's is a little on the strange side.

Answer 3

E. A real estate agent will tell you, base upon what other houses sell for in your neighborhood and any up-grades you did to your house. Then there is what the housing market will bear. No buyers, but plenty sellers prices go down. There are many more reasons for the price increases, but those are most likely reasons. Oh! I forgot another major one, property appraisal by your city. local

Answer 4

E) The seller can think whatever he likes. Reality is when the transaction takes place. How much is realised depends on marketing as much as on markets. On time of transaction, there is a difference between value and price. Price can be measured e.g. present cost of money which is just a measurement. Value of the other hand depends on things like "fond" memories etc.
People who ask such questions unfortunately, know the price of everything but the value of nothing.

Answer 5

Yes. Because there is some rich idiot out there that is willing to pay that much for it.
Same crap for "art", paintings in particular. Do you really think a 300 year old piece of canvas with paint on it (and not really that good, I might add) is worth $50 million. WRONG! It's just an IDIOT thing.

Answer 6

I'll go with the idiot thing above.