I will pay you 70¢ for an “old” $1

Here we are in November 2008 with a housing vs. other valuable item dilemma, and it is not going to get better quickly. I do not wish to sound like a boo-bird, but owning a home no longer seems to be the American dream. It would appear, from my view, to be a nightmare, and sales data backs me up. With a strong economic source, the greater Washington area, at our edge, real estate in Fauquier and Culpeper counties has been on a strong and steady decline for the last 3 years. If you purchased a home in 2005, (let us use the median price of a sold home in Fauquier in 2005) at $419,000, in November 2008 it appears that “the median sold home” is valued at $295,000. Now, please do not get angry with me, I did not create this decline, but I would like to get the “blank” that did: I would like to ask “them” why, what, when, and for what reason.

Real estate, for the majority of my life, (60 years), has been the backbone of the American economy. Sure “it” has gone thru “adjustments,” but this is bordering on larceny. Emotion has always been a “huge” factor in the sale or purchase of a home or land, but now a different emotion has taken over. The price of lumber, nails, roofing, and all other items has steadily gone up since 2005, yet the combination of these items, a home, has gone down. Does that make any sense?

Emotion, this time fear, is my only answer. Now many may say, “it was speculators” that drove up the price of homes, yet most homes purchased in 2005 were owner occupied. Did the new owner anticipate that the home would increase in value over time, yes, but does that mean that they were a speculator? Today, instead of an owner occupied home seller, we are dealing with “the bank” as the seller in a many of the home transfers. At this rate, in 2009 we will be dealing with a majority of the homes being sold by “the bank.” Why, because we see the banks being bailed out by the “government,” thereby allowing the bank to sell at a lower price than an “owner occupied-home.” There is no bailout for the homeowner who is a person. No governmental authority has contacted any seller that I know to supplement them for their loss. No governmental authority, or bank, that I know has stayed up at night worrying about how to make the next mortgage payment. Fair, there is no fairness in this market. Loss of homes, jobs, and personal satisfaction is burdening most Americans, with many about to break. I wish I knew the answer. We can either hold on for 10-15 years and hope for the pricing to rise, or sell now, take the loss, and start over again. At 60 years of age, it is hard to start again, but that beats staying awake at night. Everything else has gone up since 2005 so now we do without, pray, and try to stay focused on our true goal. It will get better, it has too, it is just a matter of timing. Every homeowner has been hit, whether you are a seller or a “keeper,” the value of your home has gone down. Remember that when you get your new tax assessment.

By the way, in Culpeper County, the median home price for a “sold home” was $341,000 in 2006, today, November of 2008, $230,000. Hold on, the ride has just begun.

Comments, please email me at info@realestatephd.com