Jul 5, 2021

Home Values - All About A Point In Time & Other Factors

Depending on the area, there is a pretty good chance that anyone who sold a home six to twelve months ago, probably would have gotten more for that very same home today.  Values in many places have sky rocketed because demand is much greater than supply.  There is just no inventory in many places, which when combined with low mortgage interest rates has caused prices to go up dramatically.  There is no doubt that home values are about a point in time and other factors.  

People attempting to sell older high rise condos in Florida after the recent tragic building collapse may see their values go down even if there is nothing wrong with their building.  In that case, it is other factors driving values.  We often hear people say, I could have gotten more for my home than I got.  That reality is probably not.  Market forces are incredibly accurate.   A home generally sells for exactly what it is worth given the point in time and other factors that impact value.  

We are in dangerous times.  People are paying crazy prices for homes today.  Unfortunately, many have short memories and do not remember the crashes we have experienced in the last 20 years when values fell by 20 - 50% in some areas with condos suffering the greatest losses.  A real estate down turn at some point is inevitable.  None of it matters if you can ride it out; but unfortunately life events sometimes intervene requiring a sale.  At some point in the future we could see short sales meaning that the home is worth less than the mortgage owed on the home.  When that occurs, people usually walk away losing all their equity and turn the keys over the bank.   Just remember, what goes up eventually will come down.  Let's just hope you can rid out the cycle.