Let's face it. Real estate is a long term investment. When you buy your own home, you're buying for the long haul. Families aren't speculators and most people don't buy a home strictly as an investment. So while you may be sweating over the fact that your home is "losing equity" as the market depreciates, remember that everyone elses home is doing the same.
How is this a good thing? Well, if you're selling now, it's good mainly because while you may be losing value in your home, you're also going to be a buyer as well. Afterall, you've got to live somewhere. Now unless you're thinking you are going to rent for some reason, you'll be selling at a lower price, but on the bright side, you'll be buying low as well.
Many homeowners I speak with seem very stressed out. They hear what I say about the value of homes in the area and how certain statistics I review with them indicate the value of their home is not what they want it to be. Homeowners immediately think the worst and some even go into "panic mode".
But I have to point out a few bright points. One, over 50 homes a day are sold on Long Island, every day. Yes, that's everyday. Second, while home values may be lagging, over the past 4 years, home values increased over 115%. This has to be taken into consideration. The fact that home values on Long Island are double the national average is one great indicator that this is a prime area to own real estate. We live right next to the greatest city in the world and financial mecca of the United States.
Most homeowners are bent out of shape because they've lost 10% of equity in the value of their home. However, most, if not all, forget about the over 80% of accumulated appreciation they've had from 2002 to 2005! It's crazy when you actually sit back and think about it. Now of course the people who bought in 2005 and are now trying to sell (either as a speculator or tragically, a family who has found they can't afford it) have made poor decisions, so that's a little different. The other group of homeowners that aren't happy at all are the ones who took out all their money and used their home like a personal ATM via refinancing and home equity loans.
Ultimately, many homeowners find themselves in great positions. Even though the market is slowed and prices have dropped, the 115% appreciative value in the past few years must not go unrecognized. I mean, seriously people, let's wake up! That's a good thing!
I just sat with a homeowner who kept telling me "I have to walk away with $200,000 in my pocket...after I sell". Despite my best efforts to educate them on the market, highlighting high taxes, food prices, energy prices, and a weakening economy overall - they insisted their home is worth $550,000, when I was trying to inform them that it's more like $499,000. Clearly, this homeowner doesn't see the positive. He doesn't want to understand that hey bought in 1999 for $190,000 and stand to make over 100% on the investment overall (not to mention the $100,000 he took out of the property in a home equity loan)!
So in this market, when you go to call me and ask for an appointment, don't close your mind to reason. Think positive by all means! Realize that every day 50 houses get sold! Remember your appreciation values over the past few years and of course, recognize that you happened to have contacted the best in the business!
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