Here's some excellent numbers showing how the values of homes have dropped recently.
Via
Alex Silberman (Keller Williams):
As it frequently happens when I’m at a party, the subject of occupation comes up and when people discover I’m a realtor, the conversation usually gets very personal because people immediately want to know from an insider how they’ve been affected.
This weekend was no exception. We were at an excellent Halloween party (no you don’t get pictures of my costume) and the subject of a particular market came up. Although it seemed as if different price ranges were talking, the question was the same: What is my house worth and when will I get my money?
How should someone who is contemplating the value of their home feel?
As always, it depends when one bought, and when they are thinking of selling. If someone bought their home in 2001, they enjoyed six unrealistic and unsustainable years of 10-20% appreciation, while traditional appreciation had been closer to 4-5% per year.
Let’s compare a hypothetical 25% loss of value between 2007 to today with what reality should have been. Yes, I’m using a post bubble lens but bubbles are only real for brief periods, and that’s the best lens we have.
If a $500K house were bought in 2001 and appreciated 12% yearly until 2007 then depreciated 25% from 2007 to today, the house would be worth just over $764K. On the other hand, if that house appreciated a consistent and mere 5% (boy doesn’t that sound good), that house would be worth less than $739K!
Yeah, I know it hurts, and it’s not politically prudent to tell you, but you shouldn’t be complaining. That $45K was monopoly money you get to keep.
If you bought that same house in 2006 for $881K, then things are a bit different for you as it will take you four years (at 4% appreciation) to get back there. The good news for you is that get back there you will, if you don’t need to sell sooner.
Many have genuinely suffered over the economic downturn in the past year and a half, but many also are still enjoying the benefit of the crazy price climb.
The financial crisis has been a bitter pill to many people, but we shouldn’t be quick to forget the honey we’re still tasting.
You know where to send your hate mail.
Alex
;)
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Thanks for sharing. I agree with the author as I am always ask the same questions "hows the real estate market doing." My canned response is "it is unbelievable!" Thanks for the facts to add to my bag of responses on price.