The secret to gaining wealth from your home: Stay put
During the housing boom of 2001 through 2006, it seemed like everyone was making big money from buying and selling homes. Sellers would list their residences and, if they were in a desirable location, sell them within days. They’d often have multiple buyers outbidding each other. When the process was over, the sellers would many times walk away with a final sales price that was actually higher than the listing’s original asking price.
That’s all changed now. In fact, today’s housing market is almost an exact opposite. When sellers list their homes today, they know they’ll sit on the market for months. They know there won’t be any bidding wars. And they know they’ll probably have to accept an offer that is lower than their listing price. It’s the new real estate reality.
The statistics bear this out. The latest report from the National Association of Realtors shows that home prices and sales in October dipped yet again. This is hardly anything new. Sales and prices have been falling for more than a year now.
But residential real estate is still a good investment, despite all this bad news. You just have to approaching buying a house with the right attitude. The key to watching your home appreciate in value is time. Over time, your house will appreciate. Even if you bought your home last year and it has since dropped in value, if you hold onto the residence for five years, seven years or longer, your home almost certainly will be worth more than when you bought it.
Of course, no one can guarantee this. But that’s how residential real estate has worked over the years. It has always appreciated over significant enough periods of time. The problem now is that owners have unrealistic expectations fueled by the housing boom that ended in 2006. Everyone still wants to be able to sell their house two years after buying it and make big profits. It usually hasn’t worked that way. We all became spoiled during the real estate boom years.
Remember, too, that a house is more than just a financial investment. It is a place to live. It’s where you watch your family grow. It’s where you celebrate milestones, birthdays, anniversaries. It’s a shelter when times are tough.
And the good news is that this shelter will still appreciate in value, if you’re patient enough to give it time.
