Are Home Values Coming Back?
Many people believe that the value of their home will magically return to those of 5 years ago...nobody knows if those values will return in 2 years, 5 years, 10 years...or ever.
Let's look at a few known facts;
Home values have historically appreciated at a rate near the rate of inflation—once you adjust for the differences in size and discount for geographic areas. This trend definitely changed when we began the recovery from the “tech-bubble” of the last decade. As the Fed encouraged easy credit and the mortgage industry discovered they could package and market sub-prime loans at premium prices, we saw a housing boom unlike any we’ve ever experienced. Driven by increased demand, home prices skyrocketed, rising 10%-25% or more per year in some of the hottest areas.
Now that prices have fallen by 30% or more (60% in the worst areas), owners want to know when they’ll recoup the value lost during the crash.
Many homeowners who are nearing retirement, had viewed their accumulated equity as a cushion to supplement their retirement income; others saw it as a fast track to “easy street,” and have already spent their “windfall.”.... they all want to know when are home values coming back.
Well, nobody knows when prices will comeback...if ever.
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