" A year ago I might have hoped that we'd sell our house for 60% over what we paid: today I might say 50% Next year I wouldn't be surprised if it is closer to 45%"
This is a direct quote from the New Sunday Times magazine dated 9-9-2007. It's entitled " Appreciating Depreciation," and with the ironic sub-title" The end of the housing bubble has one upside. We may start thinking of our houses as homes and not investment assets."
This home-owner author doesn't bother to mentioned the name of the community which is 20 miles west of New York City. He also failed to state if he ever had his home appraised.
Nor does he bother to give the reader any factual current real estate sales information such as number of homes currently on the market, and current and actual sales prices of comparable real estate in his neighborhood.
Rather he blathers on with " Like most people, I instinctively consider value in terms of the particular charms of my home."
He does state that he paid $425,000 in 2001. Lime a great many home owners, he may need a crash course of Economics 101. Past price, often times, has little or nothing to do with present value.
He may wish for a 60% increase and now may have to settle for a 5%, 10% loss.
Did he overpay in the year 2001? No one likes to admit this sad fact of real estate but often time it happens. Mr Greenspan called the syndrome "Irrational Exuberance." And I believe we saw a lot of this in the real estate market in the past several years.
Real estate is not "instinctive." It require knowledge, research and even experience.
Sadly articles like this one just continue the 'pricing myths.
Does our home-owner author think that if he may have overpaid that the next buyer is obliged to bail him out? The days of rapid home appreciation is over. Long over.
We need to once again look at houses as homes and not as investment assets. We need once again to return to the tried and proven methods that worked so well in the real estate industry until it was way-sided by the Wall Street tycoons and MBA wiz-kids. We all need a return to real estate normalcy.
Bill, McInerney, Realtor
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