House price?

Question

I bought my first house in August in a rural town in MN for just over 100k. The town is small about 3 thousand people.

The house had been on the market for like 6 mos, so we paid even lower than the twice cut asking price. The bank apparisal was for about 20k more than we paid, but the tax assesment was for 10 k less then we paid, but the tax assessor dosen't go inside the house, just assess the house sq. footage and land.

We've painted and put in new hardwood floors in two rooms since we moved. And we have plans to do more before we move out in 5-10 years.

But I keep hearing all this stuff about how homes are going down in value. One report I heard today said homes have depreciated 5% since last Nov. Arggg. Was I stupid to buy a house? Do think my house has deprecated? If so by how much?

Answer 1

You are living in your house so it's market value is meaningless. In 5 or 10 years if you choose to sell it, it will be worth what it is worth at that time.

Answer 2

Not necessarily. Many real estate markets are relatively stable in pricing. What you see on the news generally relates to those markets which were grossly overinflated in the first place. Rural Minnesota didn't undergo that sort of rampant value inflation, and won't undergo any sort of rampant depreciation either.

You are probably in a situation where you have had some valuation depreciation, simply due to market conditions, but nothing to get excited over.

If you're worried about that tax valuation, ignore it. Many times, if not most, tax valuations do NOT reflect market values.

Answer 3

You have to keep in mind that the market is unstable at this time. Your home value is lower now because that is what the market demands. It is a buyers market meaning that there is an abundance of homes for sale making the pricing on homes very competitive and some times under the real value. Hold on to your property and when the economy rebounds you will be ok.

Answer 4

You want the taxman to access your property for lower! This is standard practice. My home is worth about 300k and was accessed for 136K. This is a good thing. Property Values have gone down dramatically accross the nation, but probably not much in your neck of the woods. You don't have anything to worry about, unless you bought your house for a quick turn investment and you plan to sell right away. Don't worry, you'll get your money back if you're going to stay for awhile.

Answer 5

You say "rural" -- is it within commuting distance to the Twin Cities? If not, I would not foresee the house appreciating much in value, unless there are some big employers near you/a lot of job opportunity in your area.

We live in California, but have a small 3-bedroom house in a small Iowa town, and its value has not appreciated in 10 years.

Answer 6

Unless you are like my sister that buys and moves into house and sells them in 5 years, trying to make a profit, why does it matter? You can do tiny little things to your house that GREATLY raise it's value, so you are okay.