People baffle me. Why is anyone surprised that home prices have decreased?
“We expected people to get a little more in touch with reality especially over the summer, because you couldn’t turn on the TV or read the newspapers without seeing that home prices are falling,” said Amy Bohutinsky, a spokeswoman for Zillow.com. “It was very surprising to see this kind of disconnect.”
In fact, the median sales price of an existing home dropped 9 percent to $191,600 in September from a year ago, according to the National Association of Realtors.
It took John Cicero and his wife an appraisal, some convincing by their real estate agent and some hard-to-swallow facts to get them to lower the $525,000 listing price on their five-bedroom home in Valrico, Fla. They closed two weeks ago for about $380,000.
“We didn’t really understand the severity of the market,” Cicero said. “We lost close to $100,000 in equity so we were walking away from real money.”
Stay put then, and wait until prices go back up. Or just accept that you gambled and lost. That’s how it goes sometimes. The flip side of this story is that people are snapping up bargains and the new homeowner rate has increased.
“It’s been an optimal time for entry-level buyers with a long-term view,” Yun said.
According to the study, the median age of first-time buyers was 30, down from 31 in 2007.
The median income for a first-time buyer was $60,600 and typical first-time buyers bought homes costing $165,000.
I no longer have cable TV, but I bet all those home-flipping shows are off the air. The market has changed. Eventually it will change again, but for now, the vast majority of people are like we are – not too worried about their home’s current value because we intend to stay put, and we worry about adding more debt.
The flipping shows are still on but I think they are quickly losing favor. The reruns are ridiculous… a 900 sq. ft house in California selling for $400,000. Are people nuts? That house wasn’t worth that at any point in history, I don’t care what the realtors told you…..
The reason people are upset about their house value is unlike you and I, they have been thinking of their house as a bank and using as a bank. Taking risky loans, borrowing equity that wasn’t realistic and thinking that brick and mortar was really gold. If you can afford the payment, stay put. Unfortunately most people don’t think this way…. they just think that someone (read the government) should bail them out of their deep hole because…. “NOBODY TOLD ME…..” Common sense folks, common sense.