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Time to Sell:
For most of us, our home is the most expensive thing we will ever buy.
Today’s market conditions are confusing and often frustrating to everyone.
We certainly don’t claim to be financial wizards but we are in need of many
types of homes in the area.
It can be extremely overwhelming when the time comes to consider if selling
is right for you and your families future.
As you can imagine, we monitor the housing market. One recent article
caught our attention. “The 7 New Rules of Financial Security” by C. Bigda
and P. Lim published in the April 2009 copy of Money magazine challenges
some of the traditional thoughts about finance. “Rule #5” in the article deals
with your home. “OLD THINKING: You can expect your house to appreciate
handsomely over the long run. NEW RULE: Your home won’t make you rich.
But it is an important savings tool.”
Here are a few paragraphs from the article:
“Even many housing skeptics-never mind the folks at Fannie Mae and the
National Association of Realtors-took it for granted that home prices trend
upward. You heard a lot near the top about how the market would have to
“cool off” or “get back to normal”-the implication being that slow but steady
appreciation was the future.
But the long-run data always told a different story. Yale University economist
Robert Shiller, who has the distinction of having called the end of both the
tech-stock boom and the real estate bubble, looked closely in 2005 at the
history of home prices since 1890, using a database he constructed. What he
found was surprising. Except for two spectacular booms-the first after World
War II and the second starting in 1998-real estate appreciation has been
unimpressive after figuring in inflation.”
“Even when prices are rising, gains on real estate are not as dazzling as they
look, once you account for expenses. Maintenance costs typically run at
about 1% of a homes value annually, in addition to insurance and taxes. If
you remodel, the most you can expect to recoup is about 80%. You have to
pay steep fees when you buy (up to 3% in closing costs) and sell (up to 6% for
Another real estate outlook article beckons “When Will Home Prices Hit
Bottom, Already? As stated in the article, “…watching one of your biggest
assets tank is about as much fun as being chased by hornets. When will the
pain stop?” According to author Amanda Gengler, median prices will fall
another 10% on top of the 27% they’ve already fallen since 2006. And that
assumes that federal recovery efforts are going to help. “If they don’t, says
Economy.com’s Mark Zandi, the bottom could come as late as 2011.” Mike
Larson, who is a real estate analyst at Weiss Research predicts that “after
home prices hit their lows, they’ll probably stay there for a few years as the
economy slowly struggles back to its feet. Prices aren’t expected to reach
their 2006 levels again for another decade.” In the article, Realtor Ellen Klein
recommends “Right out of the gate, price your home at 10% below what
comparable ones have gone for. …do whatever it takes to unload now. The
longer you hold on, the more value will erode.” Here at PA Home Horizons,
we’re in the housing business for the long term and if you are looking to
move, contrary to popular belief, now could be the best time to sell.
Contact us today to find out how we can help you by buying your house!
Do you have questions? Would you like more information? Contact us today!
PaHomeHorizons.com does not have any affiliation with any author or publication mentioned on this page and nothing
here should be construed as financial or legal advice. This is simply a collection of opinions from experts in the field
that will hopefully aid you in making a decision you can be happy with!
family owned business,
that has been buying
and selling homes in
for over 20 years.