Will The Value Of My Home Always Rise?
Remember when we all expected that the value of our houses would increase each year? County property tax assessors had the same expectation and raised the assessed value and the taxes of most of our houses as the market values increased. It’s fair to say that those days are over and homeowners all over the county have to accept that fact. As a result, I’ve made a change in my mental calculations whenever I sell my house and I no longer make the assumption that the market value has increased.
First of all, I check out the local multiple listing service which is easily accessible through the websites of local agents. I look for houses that have the same number of bedrooms and bathrooms, and the same type of construction and age as my house. If my house is faced with brick I generally compare it to other brick houses. And of course the age of my house is important, too. If it was built in the 1980s I try to compare it to other houses built in the same approximate time period. The other houses I find are called “comparables” and this is the same way that real estate agents and county property tax assessors establish value as well. I have access to the same information they do, and I’d better use it to establish my selling price when I sell my home.
Having established that the days of automatic appreciation are over, it’s best to assume a house will sell for the price that the market will bear, and that particular price is partially determined by the price of comparable houses on the market. That’s why I research other houses on the market whenever I sell a house in order to establish my asking price, because setting my price too high discourages potential buyers from making an appointment to see my house.
Because I buy and sell houses regularly as an investor, identifying comparable properties is a critical step in the process of establishing my asking when I sell my house. Researching the sale price of properties that have already sold is important, but I put more weight on listed properties now than I do the sale price of sold properties. That’s because the marketplace is so volatile and so the most current information is the best. In case you don’t want to do this research yourself, you can ask your agent to do the research for you. The point here is that you cannot assume your house is appreciating in value if you’ve owned it for a few years. Appreciation in value is no longer automatic in most parts of the country now.