Can I sell this home in a few years for more than I paid?

Buyers often wonder and frequently ask me if they will be able to sell their home in a few years for more than they paid.  The correct answer to this question is, "I don't know."  Home prises rise and fall with the market, and there is no way to accurately predict what will happen.  There are some demographic trends that suggest certain long term direction in demand for housing.  Problem is that even population growth can't be used as a completely accurate indicator of housing demand trends.

Although we can predict population growth with fair accuracy, we have a harder time projecting population numbers into household numbers.  A more or less vibrant economy will influence the number of multi-generation households, as we are experiencing today.  What we do know is that economic trends have slowed the number of new homes being built, possibly to a level at or lower than replacement rates.  The number homes being built in a year is close to the number of homes being torn down or lost to flood, fire, wind, etc.  

The best news is that we cannot predict that your home will lose value in the next few years either.  That is something that can't be said about a new car, truck, boat, or most other consumer goods.  Likewise, it is guaranteed that whatever you're paying in rent will be lost immediately at a rate of about 100%. 

Is there some risk involved with buying a home?  I guess so, but there's also risk involved with getting out of bed in the morning.  Everything we do is a risk, albeit a calculated risk.  Since you will probably own a home initially for a small percent of its value, the risk of losing "everything" is substantial.  However, when you consider that you own your home with a little money and a big promise, you get to live quite well for that calculated risk.

When you buy a home, the price you pay gets you a lifestyle upgrade that is hard to quantify.  How much is a secure yard for the kids and the dog worth?  How much is a safe and quiet neighborhood worth?  How much is a home without a landlord worth?  If you own your home for a few years and sell it for less than you paid, you can still probably consider it money well spent.