This year, most Americans have seen the value of their home drop faster than a lead weight. If you purchased your home in the last 10 years, during the housing boom, you will likely find that it is worth less today than what you paid for it%u2014and in some cases less than what you still owe.
This year, most Americans have seen the value of their home drop faster than a lead weight. If you purchased your home in the last 10 years, during the housing boom, you will likely find that it is worth less today than what you paid for it—and in some cases less than what you still owe. In an avalanche of credit spending, many homeowners took out second or third mortgages and do not have enough equity in their home to consolidate these loans by refinancing. All of this has led to a rash of foreclosures, which serve to push home prices down even further.
According to , few cities have escaped the hit to home values. Residential housing prices in California have dropped 23% to 28%, and those in Phoenix and Las Vegas are down even further, from 29% to 30%. The real estate market in New York City has not been affected quite as severely, with values dropping 7%; and home prices in Columbus, Ohio, are flat.
The good news is that many economic experts predict housing prices will hit rock bottom mid-2009 and begin a slow bounce back. In October, the nonprofit Urban Land Institute (ULI) released its 2009 Emerging Trends report and lists the top 5 real estate markets for 2009 as Seattle, San Francisco, Washington, DC, New York, and Los Angeles. Rounding out the top 10 are Denver, Houston, Boston, Dallas, and Chicago. The ULI report suggests that those who invest in housing now may start to realize a return on those investments with a predicted economic recovery in 2010.
With the glut of homes for sale, it is clearly a buyer’s market. But what if you are the seller and you need to unload your home quickly? First, you need to draw the buyer to your property, and real estate experts say the best way to do this is by pricing your home slightly below your area’s market value. Many homeowners overestimate the value of their homes in today’s market. A real estate expert can help you set an attention-grabbing price.
How do you make your home stand out from the others on the market? Experts advise against making costly upgrades, like full kitchen or bath remodels. They suggest limiting yourself to home improvements that will offer a dollar-on-dollar return for your investment. They also say there are many inexpensive things homeowners can do to attract buyers:
• Improve your home’s curb appeal.
Power wash siding, retouch peeling paint, fill flower beds with bright, easy-to-care for flowers (and keep them weeded), trim overgrown bushes, sealcoat the driveway.
• Keep the interior clean and avoid clutter.
Wash windows, baseboards, and carpets; dust furniture; throw away or pack every thing you do not need—including family photos and personal mementos. Rearrange furniture to open rooms up, and try to keep rooms sparsely furnished, which makes them look larger.
• Make modest home improvements.
Repaint walls (always use neutral colors), add crown molding, replace stained carpeting, resurface (rather than replace) outdated kitchen cabinets. Hardwood flooring is also a highly sought-out feature.
If you are not in a pinch to sell your home, you may want to hold onto it until the market shows signs of improving. Alternatively, if you want to take advantage of the lower prices and move your family into something bigger, there may be no better time, assuming you can obtain financing. Patrick McGilvray, president of TheHomeBuyingCenter. com, cautions that buying a foreclosed home can be tricky and recommends using someone with experience in foreclosed real estate when going this route.