Profile picture for AyatollaofMotorola

Will prices ever go back up!!!

I bought my 3 bedroom, 2 bath home in South Natomas for 185,000 in 2007. It is about 1,300 sq feet. Will I still owe close to that on the house. Will if ever go up enough for me to sell? I want to move!
  • November 14 2011 - South Natomas
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Answers (18)

Best Answer

Hello-

As one that works and lives in Natomas, I can tell you that based on the preliminary information you provided in your post, that you are most likely underwater water on your mortgage. I'd need to go into greater detail on your exact situation in order to intelligently suggest options. I'd need to know: where you intended to buy your next home, how much you could put down on the next home, what market rents are on your current home... etc. Depending on the answers to these questions, a solution will become more clear to you and I.

I hope this has been helpful.
 
  • November 14 2011
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Values will go up and in a number of markets they have started. 

Be patient!  Your time will come!
  • November 16 2011
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Profile picture for sunnyview
I think this link will work for the graph US housing prices 1890-2008. There are also a lot of good graphs on this site by state and region here.
  • November 14 2011
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Profile picture for wetdawgs
@ Dan the country hick:   I get an error message when I click on your link.  " Firefox can't find the server at %20blog.jparsons.net"
  • November 14 2011
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Find an expert in your neighborhood, whether it's an appraiser or a broker/agent.  Local knowledge will always outperform data driven knowledge from sites like Zillow or Trulia.  As for home values, don't expect a jump back to today's price until mid 2013.  For you to gain value to where you can come out ahead of today's price, I'd say you're 4-6 years away given the current circumstances.  

Most important thing is consult the experts in the area for a local opinion.  I've seen differences in neighborhoods just by going over one block.  It can be that local.  Good luck.
  • November 14 2011
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Profile picture for the_country_hick
Greg, Actually, house prices do not really change much over time. They remain pretty constant over time after adjusting for inflation.
If you look at this graph US housing prices 1890-2008 you can see what I mean. Yes, you can see booms and bust but the trend line was pretty much constant over time.
  • November 14 2011
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Profile picture for sunnyview
We may simply have to agree to disagree. The future values for Natomas as a "preferred" or middle class Sacto suburb may be at the core of part of the disagreement.

Well that...and the use of the word "always" to describe an investment. That word seems to lead to trouble in many contexts. All the best.
  • November 14 2011
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Sunnyview, I'm not going to allow myself to get into one of these Zillow things you people seem to live for here but I never said every property or every induvidual stock goes up. Only that real estate and stock markets always go up over time. That's not an opinion, it's a fact.

As long as South Natomas is still there in the future the price of homes there will be as much, and then more, than they were in 2007. As I said when I was answering the original question is, the only question is how long that will take.  
  • November 14 2011
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Profile picture for sunnyview
Always is a long time and making those representations seems like trouble right out of the gate with little benefit. You know it comes to mind that stocks don't always go up either...
  • November 14 2011
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Profile picture for wetdawgs
Well Greg, I suspect we have a different definition of "always".  I go to dictionary dot com and see "Always: 1.every time; on every occasion; without exception"  To me, "always" would include any two or five year time frame or 30 year time frame.   Ask your clients who bought in 2007 if they like your phrase.

All numbers I've seen say housing prices in general go up only the rate of inflation (with exception of bubbles), so the dollar value may seem to have increased but in adjusted dollars to a baseline - they rarely go up.
  • November 14 2011
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Profile picture for sunnyview
I understand what you are saying, but property does not ALWAYS go up even over time. If a property has Chinese drywall and the cost to repair is greater than the cost of other options, the properties may go and stay down if no one will lend on them or they are not inhabitable.

If a house is no longer near a viable source of employment within a commutable radius, then prices may go down and stay flat or drop in relation to inflation of other commodities. Most times you do not have issues that are long standing like this and the market takes care of finding the marketable value, but there are exceptions.
  • November 14 2011
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Wetdawgs,

Real estate prices always go up. I didn't say they go up over every 5 year period, only that they always go up over time.

Since the beginning of record keeping real estate, like stocks, always go up over the long term. There are bubbles and busts but they always go up. If you look at a long term chart it's a linear diagonal line upwards.

The day that stops being true it won't matter what your house is worth because it's all over...

Greg

  • November 14 2011
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Profile picture for sunnyview
You will probably have to wait quite a while to sell if you bought in Natomas in 2007. If you can rent your home out for close to your expenses, you could rent it out and move somewhere else. Other wise you may want to look at short sale after talking to a local attorney to explore all your options.
  • November 14 2011
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I figured out that mathematically, if prices were to appreciate 4% a year, and your home is presently worth 50% of what you paid for it, it would take you 19 years to get back to that point. I work in the short sale market day in and day out in Sacramento. From what I see, from my perspective, we aren't going to see any improvement in the Sacramento real estate market for at least 5 years and maybe 7.

Elizabeth Weintraub
Broker-Associate #00697006
Lyon Real Estate
Your Sacramento Short Sale Agent
  • November 14 2011
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Profile picture for wetdawgs
Greg comments that housing always goes up.  He must not have been alive for the last five years if he has that impression.  Welcome to the world Greg!

  • November 14 2011
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Profile picture for the_country_hick
I seriously doubt it on an inflation adjusted basis. To see why look at the links inside the thread below.

Do you know what the housing bubble really looks like? ... - Zillow Real Estate Advice

You can see how real estate went into a bubble. Bad lending practices allowed unrealistic borrowing to happen. That will not happen again for a very long time as the lenders got hurt badly by it.

If inflation takes off hard and money loses half or more of its value then everything will cost more including houses. But when inflation is still running hard house prices will just drop more. Once inflation is stopped cold in its tracks house prices could increase at that time.
  • November 14 2011
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The simple answer is yes, it will go back up. Real estate always does.

The question is when.  Buying in 2007 was buying at the tip top height of the market so it will take the longest amount of time before prices get back there. But it will happen.

Sincerely,
Greg
  • November 14 2011
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I would recommend calling an appraisal company (NOT a Realtor) and get an appraisal. Costs usually run between $250 and $400. They'd be a disinterested 3rd party who would give you an opinion of value without bias. I'd avoid an agent, you'll just find people who will give you the price you want to try and buy the listing. Find out what your local closing costs run (including standard agent commissions) and see where you stand based on estimated sale price and costs.

As far as "will it ever go up enough for me to sell?" That's a tough question no one has an answer to. Maybe the market will turn around tomorrow. Maybe not. Maybe Wal Mart will decide to buy up all your neighbors houses and build next door to you. Maybe your street will become a desirable location for Hollywood celebs and prices will skyrocket. Don't buy a home based on what you think it will be worth later, buy it because it's the right choice for you overall.
  • November 14 2011
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