Must we endure yet another year of
housing crisis? What choice do we have? No amount of optimistic projections and
statistical manipulation can remedy this protracted housing pain. Historically
speaking, five to seven years has been a standard interval for house prices to
stabilize following serious corrections. By that measure, the worst should
be behind us.
There is some good news: Mortgage
rates remain at their lowest point in nearly 60 years, and prices are
settling in several markets. Real
estate is becoming more affordable and needs-based instead of
speculator-driven, making a home primarily a shelter once more.
Meanwhile, some see another year of value declines in 2011, perhaps up to 7
percent. Several more waves of adjustable-rate
mortgages are set to ratchet upward for homeowners in 2011. "Strategic
defaulters" are surrendering their upside-down loans as a financial
strategy, not because of extenuating circumstances. And unemployment remains
Yet, people still move up and still move down -- buying and selling homes to
meet those ends.
Tip #1: Sellers: Redefine "market value"
If your home has been on the market far too long, there's a
good chance you're not facing market realities. The value of your home isn't
what the tax assessor says it is, or the sum on that two-year-old appraisal you
have filed away. It's not what a similar-size home that sold across town. It's
what a buyer is willing to pay today.
To arrive at that sum, the sales prices of foreclosures and short sales must be
factored into the equation, along with the average value of seller concessions
in your submarket. These factors are advanced by the Federal Housing Finance
Agency, or FHFA, in its appraiser
code-of-conduct revisions to ensure more accurate documentation of market
conditions. If your agent tells you that you're overpricing your house, he or
she may not just be trying to grease the wheels for a quick commish, as you