Generally speaking, there are three critical areas of concern in the acquisition or sale of a property. They are shelter, safety, and financial security. The emotional and economic importance of each of these factors assumes priority in each of our lives on a distinctly individual basis.
The influence of each factor shifts to reflect the changes in our lives and it may become necessary for us to let go of previously held positions in order to move forward. As the economics of the real estate market continues to shift, we are best served by a willingness to adjust to realities rather than to hold on to our former expectations.
How do we determine the “value” of the shelter, safety, and financial security a home gives us? For both the buyer and the seller, it may help to consider the long-range picture.
How do we really place a value on a home? A home is far more than financial security. For most of us, our home is a safe “nest” for our family and ourselves.
Our home is where we can take off our shoes and relax. It is a place where dreams are fashioned, fulfilled, and shared. Our home can reflect our identity and, in some ways, our sense of how well we have fulfilled our financial hopes and dreams.
The home becomes a measure of our success. It is therefore very understandable that adjusting to a downward changing market place is very challenging for potential sellers. If you are a seller in the current market place, detaching from expectations based on what the market “used to be” may enable you to more effectively and profitably succeed in the desired sale of your property.
For a potential buyer, it may help to detach from the expectation of timing a purchase at the bottom of the current market. With home interest rates still very close to historic low levels, if the rates increase even only 0.5 percent it could offset potential cost savings of 5 percent or more of the home purchase price. Also, statistics show that over the long-term, Westside homes appreciate at an average annual rate of 7-9 percent. Of course, the savings from income tax deductions can be substantial, and obviously don’t occur until someone actually purchases a home. The sooner the buyer purchases the home, the sooner the buyer can enjoy the special values of home ownership.
For buyer and sellers, values and priorities determine how the housing puzzle pieces fit together.
Michael Edlen provides real estate counseling services to prospective buyers and sellers. He can be reached at 310.230.7373 or [email protected] More information is available on his website, MichaelEdlen.com.