So many of us are wondering what direction the real estate market will go. Will prices rise, will prices fall? Will foreclosures increase or will they decrease? When will the market stabilize and when will prices recover?
The answers to all of these questions are the same…who knows! Pundits are all over the place as to sales of existing homes in our area. Most agree that it will be 3-5 years before we see equilibrium as to numbers of buyers and sellers. That is the point where values may be more predictable and possibly rise with inflation (1-3% depending on economics at that time). We do however have total control as to how we choose to perceive the market!
If we accept the fact that homes will always sell for what the market supports, in this case what buyers will pay, then we can make peace with where we are today, not tomorrow or 10 years from now. In most areas, properties have adjusted downward by 15-30% on average from prices in 2005-6. I do market estimates in the four county Milwaukee-Metro area. When I am finished with the estimate of value, most sellers thought their home was worth about 10% more than the current market offers. That is normal. We can accept reality that we feel comfortable with, and no more.
If we instead, accept market prices where they truly are, and not where we would like them to be, then make plans based on that figure, you may find that your plans to purchase or move into an apartment or community will work just fine with net dollars you receive. Try to keep in mind what you originally paid for your property and then look at the appreciation you’ve enjoyed over the years. For those who purchased in the last 10 years or so, there may be little appreciation or a loss. That is reality. But even for those with negative equity, you may do well to purchase another and make up that loss on your new purchase. There is a saying, “in a down market buy up”. That is because if you are purchasing a home in a higher price range, that seller has seen a larger reduction dollar wise than you have.
If you can make peace with where we are today as to your real estate value, and accept the reality of our economy, you can then make decisions based on logic rather than anger and disappointment. We can’t change reality, but we can change our perception of today’s real estate market.
Homes will always sell, as owning a home is far preferable to renting for most families. Therefore know that you can make your plans to move to better your lifestyle. Proper planning and perspective can be the ingredients to a more enjoyable life if that is what you truly want…it’s up to you to make it happen if you so choose.