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

Industry Observer

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.

Posted by

 Mike Carlier  Lakeville, MN





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Anna Banana Kruchten CRB, CRS, Broker, Instructor
HomeSmart Real Estate BR030809000 - Phoenix, AZ

Mike I agree. We can't guarantee anything.  We can make projections based on the current trends and then it's up the buyers to make their choice/risk.

May 17, 2012 06:30 AM #1
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

Com'on Mike...get the crystal ball out of the closet and dust it off.  It should still have a little magic in it.

May 17, 2012 06:52 AM #2
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Anna, as consumers we should be concerned most about the amount of potential use and enjoyment we will derive from buying a home.  Although it's not possible to measure either, we buy homes that we will live in for the expected lifestyle change.  Fact is that, unless we have a catastrophic event, such as illness, domestic blow up, or unrecovered business or job loss, our home's value can go up or down, and we will continue our use and enjoyment without major concern. 

Bill, my crystal ball says that the new Lamborghini in your garage will probably lose value:)

May 18, 2012 11:49 PM #3
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Mike Carlier

More opinions than you want to hear about.
Everyone has opinions -- what's yours?