Go Back To Article List
Home Values Continue To Decrease In 2010
Tuesday, December 14, 2010
The economy is not getting better. This might sound like a blunt statement, as well as one that you did not want to hear, but it’s a fact - and there is no avoiding it. It’s also a fact that the backbone of America’s wealth is real estate
. Up until 2006, millions of people used their homes as ATMs. Since home prices continually increased at a rapid pace, homeowners also used credit in an assumption that their home would continue to increase in value. It was a case of assumed future wealth, which is always dangerous. What ended up happening was a state of irrational exuberance, which led to an enormous real estate
bubble burst. Now we are headed in the opposite direction. Instead of home prices inflating, they are deflating.
Home values across the United States decreased by $1 trillion in 2009. This didn’t come as much of a surprise since it was relatively close to the real estate
bubble burst in 2006 and very close to the stock market crash in mid-2008. What did surprise most Americans was the news that home values decreased by $1.7 trillion in 2010. Weren’t things getting better? If you take away the Homebuyer Tax Credit and other government programs put into place to kick the can down the road and keep Americans optimistic for a while, it would become painfully obvious how much trouble we are really in. Put simply, when your house value is decreasing, you are losing wealth. And this is going on in 76% of housing markets across America. While all of these housing markets are hurting, the worst of the worst right now are New York City and Los Angeles. But don’t feel at ease if you live somewhere else. Deflation is upon us and it is extremely powerful. There is an excellent chance that even the good housing markets will fail. This has led many people to saying, ‘I want to Sell My House Fast
Many top economists – the ones who don’t work for investment firms and have vested interests – state that the best move you can make right now is to sell your home
as fast possible, rent for two to three years, and then buy a home again when deflation has set in and homes are at record-low prices. This might sound like a risky move, but if your house value is going to lose another 15 to 50%, it’s the best move available. Sitting around and doing nothing would be the same as burning money.