There are people out there who recognize that if they sell their home right now they may not get the price they want. So they decide to wait “till the market comes back”.
Unfortunately, no one knows for sure when that will be. No one really thought prices would still be dropping today but in many parts of the country we have not yet hit bottom.
So let’s look at a possible scenario:
Let’s say you are a seller who wants to price his home at $200,000. The agent feels the home should be at $185,000 (a 7% difference).
You decide to wait till the market meets your price.
Well, take a look at this pricing scenario.
I tried to be conservative on everything. I’m only suggesting a 5% potential drop in price between now and next year. It could be more (as we’ve seen this year when no one expected prices to continue to slide) or it could be less. I’m also forecasting an increase in price beginning next year of 2% a year. It could be more but it could also be flat for several years.
Using these stats, you’re looking at 2 ½ years to get back to today’s REAL value of $185,000. But it will take 7 years to get back to the $200,000 that you think your home is worth today. Do you REALLY want to wait that long?
Now this is only one possible scenario and I could be way off. Opinions are like belly buttons – everyone has one. Just know that there are plenty of folks out there who were waiting this time last year on the market to go up and now wish they had sold then!
Crissie Cudd, Southside Manager Watson Realty Corp
www.WatsonRealtyCorp.com
Great example, and probably more conservative than I've advised. Can you share the graph?
ReplyDeleteTotally agreed, so TRUE!! I believe prices will still come down especially in the $200'sK and up. Maybe under 100K are stablelizing now but not higher than that. Can not imagine when the market will be back to what it was in 04-05. By then the houses will have depreciated in value anyways.
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