No matter which way you turn you are hearing about the downturn in the real estate market. Everyone is talking about how much money they have “lost” on their home since things took a turn for the worse.
But is that true?
Is everyone here in Redding “losing” money on their home?
If you are reading this article and bought your house in the last several years, there’s a good chance that you have lost money on your real estate investment, especially if you are forced to sell today.
But how many people bought homes in Redding during this time? Actually, a very small percentage of the homeowners in Redding.
So let’s talk about the majority of you who bought your house before – let’s say – 2003. Where do you stand on your real estate investment?
We are all so focused on how “bad” the market has gotten recently that we seem to have forgotten the skyrocketing of home values in Redding in the early 2000s.
Just for fun I looked up the average sales price of homes in a nice neighborhood on the east side of town in 2002 – $280,000 – and then looked up the average sales price of what sold in that same neighborhood in 2007 -$510,000. An increase of $230,000. Hmmm, making $230,000 over 5 years sounds pretty good to me.
I looked up another, more upscale neighborhood on the west side of town. The 2002 average sales price was $412,000 and in 2007 it was $749,000!! In 2007 the market was bad, prices were down and things were bleak– but someone could have walked away with a gain of $337,000 in a 5-year period. It’s all a matter of perspective, isn’t it?
With the increase in home prices a lot of homeowners took equity out of their home and they, too, may find themselves currently “upside down” and owing more in loans than the current value of the property. That’s tough if you’re forced to sell now. But hopefully a majority of these people can hang on and weather this storm. Don’t forget though, that in this instance there still was a profit made on the initial investment, it was just taken in advance.
So many homeowners are focusing on where their homes are valued today, versus 2 years ago, instead of looking at the long-term investment.
Real estate is not typically something you buy to make a quick profit, but if you look at history it has proven to be a solid way to invest your money.
I feel strongly that it will continue to be.
And hey, what about the old idea of buying a house because it was a nice place to live and it brings joy to your family?
I guess it’s all just a matter of perspective.
*Information for this article was taken from the Shasta County MLS and is deemed to be reliable, but is not guaranteed.
Contact Lara Wells Osborn at Coldwell Banker C&C Properties – Westside, 1801 Buenaventura Blvd., Redding, CA 96001. Cell: (530) 276-3026. Fax: (530) 419-1167. Email: email@example.com or larawellsosborn.com.