does equity on homes usually go up or down for the most part and in 20 years from now will the price of homes?

Question

be up or down?

Answer 1

equity is the difference between what the house is worth at any given time and what money you already paid off on the principal balance when you bought the house.

at the beginning, it works like this:

let's say you buy the house for $300k and your down payment is 20%, or $60k. you have equity of 300 - 60 = $240k. that equity could be borrowed against, say, for example, home improvements, but i don't generally advise that.

i do wish i could convince anyone that buys a residence that it is not an investment. it is the place that you come home to, hang up your hat from a hard day's work, and relax. but since i cannot convince them because they are watching the prices of real estate go up all the time, i will say this:

yes, your house will most likely increase in value well above the price you just paid for it. but neither i or anyone else has a crystal ball to tell you how much it will go up in value. a lot depends on where it is (location, location, location are the only 3 words you need to know in buying and selling any type of real estate).

real estate pros ALWAYS know where values are going on the up and up. so therefore, when i got a house, i got it in an area that was not YET there, but would be. i paid full price for it, but it was cheap. in 7 years, the price i sold it at was about 2,000% more than i paid for it. most first time buyers are too scared to take risks like that, even when their experienced Realtor tells them that they just can't miss.

if your location is going down, in general, a "bad" area stays that way for about 15-20 years, unless (and this is not to rub anyone the wrong way) gay people move in. they love their property and always make a hood look great, and they do it fast.

you always have to consider 2 things:

the time you sell: if it is a buyer's market, like it is now, you cannot expect the same increase in value that you will get in a seller's market;

if you sell in a seller's market, sell at the beginning of it so that you can maximize your next purchase. if you wait and wait as the prices are going up (for only about 2 years, in general, followed by 5 years, in general, of a buyer's market), you will hit the tail end of the seller's market whereby the prices will be way up there, but you won't have a buyer.

i really was surprised when for the first time in usa history, we had a seller's market that lasted 5, not 2, years, and ended in early 2005. but the sellers did not see that it was over with. so their houses sit with signs in the yard, and they are "tired" listings that nobody wants to see, even if the price gets reduced.

the worst thing you can do is to overincrease the value of the house for the location it is situated in. if all the houses in your hood only have 1.5 baths, keep yours like that and do not add 3 more. don't put in a swimming pool unless you bought your house in los angeles, where everyone has a swimming pool. be careful what improvements you put in to increase value. for example, who wants avacado or harvest gold appliances now, even if they were never used and were top of the line?

honestly, you should just think of your residence as your home. if it increases in value with inflation, you are lucky. that's about all you should expect. if it increases higher than that, consider it as a blessing.

enjoy LIVING HAPPILY in your home! congrats!

Answer 2

If The supply is low,yes home prices will increase.History has shown a increase in equities over periods of time.We are seeing a some what stagnated market at this time in California.Some have lost equity.Demand will drive home prices up.

Answer 3

I paid 42,000 in 74 sold for 4800 in 77 bought for 80000 in 77 worth 390000 now.