You have found the home you want to put an offer in on. You are doing your homework in regards to the current market conditions of the home. Checking to see what has sold recently and what a fair price to offer on the house is. But how far back are you looking? What is the trend prior to the boom and post boom when the market went down? These are all factors you should be considering when looking at a house.
In the current economic state the prices are lower now than they have been in a few years. But what was the trend like prior to the market doing well? Why does this matter? A home is the largest investment someone is going to make in their lifetime. For most of us this is not only the place we are going to live and grow our family; but a place we are hoping will help us in our retirement years by growing the equity in the house. A good way to gauge the chances that the home we are buying is going to appreciate to a value that will be finacially benefical to us to track the trend of the home prices prior to the housing market boom, through the boom and post the boom. that average should be an adequate gauge of what the value of the home would be for us in the long term.
I recently did this anaylsis on a few homes and the results were quite suprising for me. We are all aware that the housing market is a fickle market. It is going to have it's ups and it is going to have it's downs. When it is up we are feeling proud of our investment. When it is down we are feeling sad about our investment. But, what is the average? Are we purchaing a home in the down below what the average should be? If so how much? Is it enough? those are only numbers you can decide.
One thing is for certain, the market is in such a state now, that buyers are doing mre due diligence to ensure that they are getting the best deal possible. But what are the long term market ramifications for the house you are looking to buy? By going back up to as much as seven years you can track the trends and see how stable the market has been and is going to be and what yoru future projected value may be based on history. then you can make an educated descsion as to the home you are looking to purchase.