Do you think real estate prices are on a straight line down? Wrong. Remember when everybody thought real estate prices were on a straight line up? Wrong! Real estate prices are up and down, and all-around. They are up in some places, down in others, and up and down in others. And of course real estate is very local, down to the state, county, community and sometimes even down to the street. You really have to dig down into the details to find out the true value of a house.
On average Washington DC real estate values has been mostly up in price. The operative word in that last sentence is “average”. There are some parts of the city that may be dragging down the average, so if you are interested in a strong real estate neighborhood like Capitol Hill or Dupont Circle, the numbers above may not accurately reflect the strength of the market. And if buying in a weak part of Washington DC, you may have more leverage than you think in negotiating the price.
And look at what is going on in the Los Angeles area, Los Angeles real estate values were down in March, and up in April. But that is on average. There may be neighborhoods that were up both months, and have been up for quite some time. And there may be some neighborhoods that have been down for quite some time. And there may be a particular home that you love on a certain street, that is a very cute house and well priced, and it may have sold for above asking price in a neighborhood or county with declining average real estate prices. The averages do not mean much.
San Francisco real estate prices were down slightly in March, but were up strong in April. As usual with real estate, you have to dig into the details, and look at the specific house, the lot, the finish, square footage, then the street, then the neighborhood, then the county, and then the state. And there are multiple factors to look at besides real estate prices, like job growth (or lack thereof), population growth, new construction building (or lack thereof), available land, etc. It is so difficult, in fact, to determine where real estate prices are going, and why, that is why it has become important again to buy a house as a home, and not as an investment. If you buy a house as a home, and because you love the immediate area, then you will be more protected against price swings since you can stay in the home longer to accommodate for those price fluctuations if necessary.
A house has always been a home. In the last boom market in the early 2000’s (technically from 1998 – 2006) when a home became an investment, and even worse a speculative investment, we all lost sight of what a house is. It is a home. Nothing more, nothing less.
Tags: real estate prices