Women Taking Ownership: What is Your Home Really Worth?
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04/6/10 | Shari Olefson | 15 Comments

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.

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  • Thank you Shari. My clients are always asking for a snapshot of our market. I will be sharing this with many of them.

    Posted by Spodwol, 8 April 2010.

  • Makes all the sense in the world. I guess we wait until the 22nd.

    Posted by laurenFL, 8 April 2010.

  • I finally feel like there is someone who can REALLY give us the whole housing story. I am looking forward to getting answers to some of our most important questions ... regardless of how simple they may seem.

    Posted by vanessa14, 8 April 2010.

  • Shari, your article was very helpful for me. You really break it down into easy to grasp terms. Thanks helping me figure this out.

    Posted by Robyn43, 8 April 2010.

  • Thanks Shari. This information is very helpful in this very confusing time of valuation. I'm off to the website you suggested to do my homework!

    Posted by Leanne Meyers, 7 April 2010.