Anyone concerned about home depreciation?

[BCHGRL]

Due to sluggish sales, my home's value is decreasing. If the trend continues for much longer, I will owe more on my home than it is worth. I constantly worry about this. Cars depreciate; homes should appreciate!

It still baffles me how property values can rise over 100% within a 2 year period only for the market to tank one year later .

[Snoopy2645]

Re: Anyone concerned about home depreciation?

Well I am but with 3 big new companies coming to town our housing is back on the rise so thier is hope but I am still in IA guess its one of the only states that homes depreciate more than they are on the rise like certain other areas!!! I may live in this house the rest of my life its kinda depressing to think of that LOL!! When I bought this house 7 almost 8 yrs ago I was buying it just tell something better came along here I am STILL EEKS!!!

[ren]

Re: Anyone concerned about home depreciation?

It still baffles me how property values can rise over 100% within a 2 year period only for the market to tank one year later .

Well, that is how your house can be worth less. If your home is appreciating faster than wages are growing, sooner or later home prices have to revert to a sustainable level, i.e. one that the average person can afford with a normal loan (not one of the crazy option ARMS or interest-only mortgages). That seems to be where we're at now. Give it a few years, things will catch up again. Same thing happened in the early 90's.

[safari]

Re: Anyone concerned about home depreciation?

I am not concerned about houses depreciating. If the downtrend continues, I'll be able to buy a bigger house after selling mine. For example, is my house is worth $500K and I want to buy a house for $1M, I'll need to come up with an extra $500K after selling my house. If the house prices drop 20%, my house would be worth $400K and the house I want to buy would be worth $800K. So I would only need to come up with $400K. Of course if you owe more than your house is worth, then you're in trouble, but in my case I have over 60% equity, so it's safe to say that the prices won't go down that much.

[MonkeyMama]

Re: Anyone concerned about home depreciation?

Not over the long haul. Not planning to move any time soon - goes in cycles.

PArticularly not concerned since our house has doubled in value since we purchased.

But even the 2 times we bought homes everyone was sure the sky was falling - 1999 & 2001. No one could believe prices could get any higher. I had relatives selling their rentals sure the market would crash - market has DOUBLED since - must be kicking themselves! PArticularly this house which we upgraded in size but downgraded in price buy moving. Everyone thought we were crazy and the market would fall. The mortgage was so affordable and I was so happy to afford a home I frankly did not care if it depreciated to 0. Though obviously it would bug me a little if it did...

We have been looking to move anyway - now is a good time for us with prices falling. Before the property taxes would get so insane if we made a lateral move, but it is a little easier to swallow. Making a lateral move is suddenly much more affordable than it was the last couple of years. IT is a good thing to some of us with a lot of equity...

It makes sense to me, our house went up $200k easy in 2005 & dropped $100k in 2006. In the end we still had an incredible $100k gain those 2 years, and the market adjusted for the anomally of the year with 50% gain for us. Things are just settling down as people have reached their limit of affordablity. Unfortunately whoever bought in 2005 is out of luck. But if they can wait a few years I am sure the market will pick up. In the meantime if they didn't buy more than they can afford, just need to sit tight and wait.

[banana]

Re: Anyone concerned about home depreciation?

I'm not worried. We are not planning on moving at all. Prices rose pretty quickly here but now it is dropping some. I still have quite a bit of equity. Overall we need a place to live and my mortgage is about the same price as a decent apartment around here.

[disneysteve]

Re: Anyone concerned about home depreciation?

I'm not concerned at all. We're not planning on moving. We're not planning on borrowing money against my home's value. Realistically, our home has no monetary value until we do one of those two things. Only then would we be concerned with it's current value. We bought our house to live in, not as part of our investment portfolio. We also don't count our home's value when doing retirement planning.

[Fern]

Re: Anyone concerned about home depreciation?

Like any other commodity the housing market is cyclical. It will come back. Not a problem, unless you need to sell now.

[beebop25blue25]

Re: Anyone concerned about home depreciation?

Where I live houses do nothing but appreciate!! I bought our house in 2000 for 140,000. We had it appraised not too long ago and it was up to 340,000. That is just in 6 years! We owe now about 130,000, so i'd say we're doing ok!

[asmom]

Re: Anyone concerned about home depreciation?

I'm not concerned either. We bought before housing prices went beserk and we got a low-interest fixed-rate loan. The only way I would be concerned is if we took out an outrageous amount of home-equity or had an interest only loan.

[LivingAlmostLarge]

Re: Anyone concerned about home depreciation?

I guess but not really until I sell.

[Elgin526]

Re: Anyone concerned about home depreciation?

Not too much, no. We bought in 2005 but we had 20% down so unless the market totally tanks, we won't wind up owing more than it's worth. And we have a 30 year fixed and both our jobs are stable. We can stay here as long as needed to at least break even, and even if we did HAVE to move, well, sometimes you just lose money on investments. It happens.

[tinapbeana]

Re: Anyone concerned about home depreciation?

not really, but i'm not in an overly inflated market either. even if i were, i bought 20% below appraised value.

[Gruntina]

Re: Anyone concerned about home depreciation?

Ha! I am really worried. I believe my fiance bought a home that requires way more work than first thought. repairs alone are expensive without any upgrades. It seems like putting lots of extra money into a home and you dont see any changes. But I checked on line and homes selling in our neighborhood are ridiculousely high. BF home is much better than most so I dont know where we stand yet.

[cschin4]

Re: Anyone concerned about home depreciation?

I am not worried about it as our home is paid off. However, it is something to consider when spending money on your home for improvements, etc. Don't put 24K gold fixtures in and things like that when you know that your home is depreciating and you won't recoup any of that type of expenditure. And, lower home price means your home is assessed at less value and maybe your taxes won't go up as much or as often so there are some positive points.