Women Taking Ownership: What is Your Home Really Worth?
  • Work and Money

04/6/10 | Shari Olefson | 15 Comments

Shari-Olefson-200x300.jpg
Shari Olefson, Esq.

America is in the midst of an economic crisis thanks, in part, to the “profit-at-all-costs”-driven behavior on Wall Street and the less-than-stellar choices made by us, the homeowners.   Maybe the stock market is recovering, but most of your wealth may be in your home, not stocks.   Whether you’re struggling to figure out how to keep your home or wondering how to make money buying distressed properties, women across the country are realizing the next five years are key to their financial wellbeing.

Your options, opportunities, and financial future may depend on what type of home you live in, what price range your home is in, and where you live.  Nationwide, as long as nothing else goes wrong, home values will increase at the rate of 3% a year, but that may take longer in some areas.  In others, values will decrease further before turning around.

How the heck do the so-called ‘experts’ know what your house is going to be worth in five years or when it’s the right time to invest in foreclosures? The answer is they don’t know exactly.  But because real estate largely follows consistent trends, we’ve developed proven indicator-based methods.  Here’s where the secret to your self-empowerment lies:   By keeping an eye on these indicators, you can make reliable predictions about your home value and investment opportunities, safeguarding your pocketbook and American Dream.

One such indicator is the National Association of Realtors Existing Home Sales compiled from Realtor-reported closings across the country.  Why should you care how many homes are selling?  Easy.  Real estate prices – including the value of your own home - hinge on supply and demand -- how many homes are available and how many folks want to buy them.  When there are more homes (supply) than buyers (demand), the price goes down until more buyers are willing to step up to the plate, normally because they become enticed by the lowered prices.  As home supply gets absorbed by buyer demand, the price of homes goes up again.

National Association of Realtors U.S. Housing Inventory


What you want to see is a steady increase in the National Association of Realtors Existing Home Sales indicator until the number of home sales is back to where it was in 2003, when the real estate bubble began.  At that point you will want to see the Existing Home Sales indicator continue to increase at a slow but steady level comparable to what typically happened each year prior to 2003.   At that point, there will be far less risk that your own home value will decrease, and instead, your home will begin appreciating in value again.   If you're looking to buy, you'll want to do that before the number of sales and prices go up again.  That's precisely why you care about the number of homes selling.

National Association of Realtors Existing Home Sales Pace


Existing Home Sale information for March will be released on April 22. A key test of whether or not your own home's value has stabilized will be whether or not you see a significant decrease in Existing Home Sales following expiration of the home buyer tax credit in the coming weeks. To check out the NAR Existing Home Sales indicator yourself, simply go to www.realtor.org/research/research/ehsdata.

Shari Olefson, author of "Foreclosure Nation; Mortgaging the American Dream," is a Bar Certified Real Estate attorney, Supreme Court Certified Mediator, and commentator for CNBC, Fox News, and CSPAN.   She is a partner at Fowler, White, Boggs, has two teenage daughters, and is a staunch advocate of teaching and preserving the American Dream for all of our children. Follow her on Twitter. Join Foreclosure Nation on Facebook.

15 Comments 15 Comments Digg Tweeter Facebook StumbleUpon Permalink Send To a Friend

Comments

  • Thank you all so much for this wonderful feedback. What I'm hearing is a passion for the American Dream with a healthy dose of commitment to make sure it lives, even improves, in spite of recent mistakes. While our mothers and grandmothers maybe have been noble and important domestic engineers we are the architects of change. Stay tuned for more empowerment! All my best, Shari O.

    Posted by Shari O, 12 April 2010.

  • Hello Shari, no doubt it is a good time to buy but we're not out of the woods yet and anyone entering the market needs to be far-sighted. With the likely increase in rates, the end of the purchase incentives, a slow to improve economy and the likely increase in inventories there's a good chance we will see some downward pressure on values. Perhaps not enough pressure to cause most values to decline, but I do belive enough to keep a lid on any healthy value improvements in the next year or two. This is not the case for all areas but more a national suggestion. Our market here in Carlsbad CA is one that is certainly bucking the trends. With less than 2.5 times the monthly inventory the markets are swift here and properties rarely are on the market more than a couple days if they are priced correctly. Mostly, hope for the best and plan for the worst. A house is a place to live and put your stuff and over time will become in investment that will pay dividends. Jack - <A href="http://carlsbadhomesforsalenow.com/best-loans-on-carlsbad-homes/">Carlsbad Homes</A>

    Posted by sandiegojackson, 12 April 2010.

  • Excellent article that gives a simple road map to the complex statistical side of real estate. Analysis and gut instincts make a great formula for successful real estate involvement, however in most instances the gut outweighs the stats!

    jgy

    Posted by jgyterme, 9 April 2010.

  • Thanks Shari O...I do believe that this is an exciting time to buy properties now far more affordable than ever before...good investments...better than dealing with this crazy greed driven stock market. Keep it coming!

    Posted by ShariL, 9 April 2010.

  • An encouraging perspective! Let's hope we start seeing that steady increase in the Home Sales Indicator soon!

    Posted by debcal, 9 April 2010.

  • While seeming simplistic, Supply and Demand analysis is a key factor in timing a real estate purchase. In these complex economic times, the purchase of Real Estate must not only include Supply and Demand data, but also be tempered with analysis of current and projected Unemployment statistics as well as the number of Pending Foreclosures currently backlogged in our Judicial system. It is a level playing field for everyone in today's market, with governmental and lending criteria changing daily. Today's Real Estate market offers great opportunity. The interest in Real Estate investment remains high and should be entered in partnership with well advised and seasoned Real Estate Agents and Attorneys capable of indepth analysis and local knowledge of the ever changing marketplace.

    Posted by Bsmokerpriest, 9 April 2010.

  • Awesome, common sense breakdown of a bewildering mountain of data. Thanks for cutting through the clutter.

    Posted by hmwalter, 8 April 2010.

  • I totally believe in the importance of the American Dream and found the information in the article to be both practical and concise. I have already forwarded to other interested parties.

    Posted by cmoroco, 8 April 2010.

  • Thanks for your interesting and insightful article. I will be forwarding this to clients and colleauges today.

    Posted by HeatherFL, 8 April 2010.

  • Shari, while many still believe real estate is a "risky" investment, the TREND indicators and parameters you talk about here will help make sense as the market DOES approach a stable platform, once again, making REAL ESTATE a good place to look for opportunities and financial well-being! This is a great resource. Thank you,

    Posted by karoncarpenter@aol.com, 8 April 2010.