Is your home still a good investment?

I sell real estate in Cleveland Ohio. We are in a declining market. That means values are going down. So what do you do if you are thinking of making a move? First of all some moves can't wait. If you are in the process of getting a divorce, settling an estate, faced with a relocation, etc.
The faster you get into reality of the present market and look at what the market is doing as compared to your property the faster you will see a sale pending sign in the yard. Homes are selling. The buyers are educated and armed with more information than ever because of the Internet. Gone are the days when some poor jerk happened into your open house and fell in love and purchased your home. Buyers look up your past history. I know when they are interested because they tell me what you bought your house for. They look at the neighborhood through websites like Realtor.com and Zillow. They can see what the average is for market time, sale price per sq ft, etc. for each neighborhood. Realtors are no longer the gatekeepers of information.
You have to be the best looking home and the best price. Price is the driver in this market. If you are trying to sell your home for what you think is a comfortable price then you are not priced right. The only clients that have a sold sign on the front lawn are the ones that sold for what they felt was a painful price. That is what happens in a declining market. If you are looking to purchase a new home and take advantage of this excellent opportunity to upgrade, than this is how your have to approach your move; 1.Realize that you are getting great price on your
purchase 2. Realize you have to give a good deal on your house. You are just trading assets. Hopefully, the new home purchase is in a more expensive, more stable area. When the market returns you will be fine. Decide which property you want to be riding on when the market starts to go back up. Realize the losses are larger the higher the value . You are going to have to ride this out where ever you are. You might as well take the opportunity to upgrade now instead of later. If you are happy with your home and aren't considering a move. Look at the foreclosure down the street from you and think about buying it for rental property. You can sell it when the market goes back up and in the mean time you have helped stabilize your own neighborhood.

Cleveland Real Estate Crisis

I may not be a economist, but I am in the trenches selling real estate in Cleveland. I have never seen so many vacant and foreclosed homes in my 23 years of selling. I am a full time agent and this is my only form of income. The market is brutal. We need to reinforce rules of the industry more than ever before.
It is also very important to understand that there are two markets out there. The foreclosure market where you may get a really great deal or end up with a money pit. Many of these foreclosed homes have been sitting vacant for years. The plumbing has been ripped out. Electric has been vandalized. When you buy one of these you don't really know what you are getting yourself into. If the property has sat through a winter with no heat it is no telling what hurdles you will face getting the property to good condition.
The other market that is out there is the lived in resale that has been cared for and updated. Many of these are in absolute mint condition. These homes are selling! They just aren't getting 2005 prices!! If you buy one of these homes you are not missing out on the deal of the century. You are getting a home in prime condition that hasn't increased in value over that last 3 years. Maybe it even decreased as much as 10%. The important thing to realize is when the market rebounds. Historically values start to increase again. So whether you are buying as fixer upper that you will put thousands of dollars into or getting one that is in prime condition you will still come out ahead in the long run.
The other dilemma is selling a home in this market and then buying. If you are buying a bigger home you will take a small loss on the selling end of your home but you will make up for it on the purchase end. Like transferring stock at a down period but purchasing one that has a greater opportunity to increase in value.

It is a tough market. Hopefully all the part time nonprofessionals will get out. Real Estate is still the best investment. You can live in it,write off the interest and taxes, and earn money by paying down your mortgage and during times of inflation your value grows.

Sandy Maline