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November 26, 2007
Housing Crunch is Less Painful in the Long View
I got a press release today from the National Association of Realtors that contained some good news on a couple of fronts. First, the NAR reports that the median price of existing houses for sale has actually risen in most of the markets they surveyed. And second, the value of existing homes is still holding up quite well when you look at the big picture. In other words, unless a homeowner bought at the peak of the housing bubble, he or she will still do just fine with appreciation over the long haul.
That doesn't make the current pain go away for builders, but it should offer some reassurance to people who bought a house in, say, 2004 or 2005. I fall into that group, and I was very glad to see my gut instinct validated. I'm not planning to sell my house for several years yet, so I'm pretty sure I'll recoup at least what I paid for it.
And it should help you remodelers out there reassure prospective clients, too. While they might not get the same payback in equity for a remodeling project that they could expect a couple of years ago, they're still making a good investment, especially if they plan to live in the house for a while. They'll get to enjoy the results of the project and get most of the money out of it when they finally do sell.
What are you hearing from your customers? Do they believe that their homes are still a great investment? Or are they hesitating to sink money into improvements?
Posted by Marjie O'Connor, HGTVPro.com Staff at November 26, 2007 3:20 PM
Comments
Hi,
I live in Wood Dale IL (Chicago suburb). It is a very bad market: new construction is sitting dead in the water and only stuff selling are a few existing older homes listed under 300K but selling closer to $200K. Great time to buy if one has $$$, otherwise, it's a scarey market. Some new condos here have dropped in asking price $75K and continue to drop.
Regards,
June
Posted by: Hanna at November 27, 2007 7:20 PM
Michigan existing homes are sitting also. People cannot get financed unless they have a healthy down payment and without higher paying jobs, that doesn't happen-and if they have a healthy down payment (20% or more) they aren't buying existing homes usually. So the very expensive (over 500,000) or the very inexpensive (under $150,000)
are the only markets getting any action and that is very little. Housing values have dropped considerably-even those purchased in your years frame-2004,2005 etc.
Posted by: Cheryl at November 28, 2007 12:58 PM
Wow! I guess if you say its getting better enough times YOU will actually believe it! Well folks anyone who believes the worst is over is swimming in the river of denial. We have only seen the tip of the iceburg in this housing market downturn. As a market investor for 20 plus years we will certainly recover from this. For Builder / Developers and "flippers." The parties over for now. Get a real job!
Posted by: James at November 28, 2007 4:01 PM
