“I want to sell my house now,” is what many people are saying in these difficult economic times. But why are they looking to sell their homes as fast as possible? Traditionally, house selling has been a way to cash in on an investment. For decades residential properties increase in worth or appreciated in value consistently and predictably. Therefore, the longer you held on to your house, the more likely you would be able to demand a higher asking price. However, in recent months, for the first time in a decade, house prices have been plummeting. Last November, the housing declined more than any other month on record. This means that the longer you hold onto your house, the lower the asking price for the property will be. It has therefore become necessary, for many home owners to sell their property as quick as possible, or they risk losing even more money. For a generation, home ownership was part of the American dream. It meant that a person was financially stable and was working towards being financially independent. Owning a house was seen as an investment in your future, a savings account, if you will, that a parent could pass down to their children after death. For many people, owning a home was the only thing that they owned outright. It was intended to be stable investment that would help generate personal wealth over time. This idea became so because, for many decades, residential properties slowly appreciated in value. This meant that, barring any natural disasters or general lack of upkeep, a property slowly, but predictably increased in value. Therefore, a house that an individual paid one hundred thousand dollars for in 1980 may have been worth one hundred and twenty thousand dollars by 1985. This means, that if the home owner chose to sell his or her property in 1985, he or she was generate twenty thousand dollars in profit. This profit could then be used for a down payment on a larger or more desirable home and the process begins all over again. It this way individuals can slowly increase their net worth. Iin recent months the paradigm has been turned on its head. Instead of steadily appreciating in value, the vast majority of residential properties have begun to depreciate in value. To understand this better, think of an automobile. As soon as you drive a car off of the lot, it is suddenly worth less. Other than some restored classics, you can never sell a car for as much as you bought it for. Houses have suddenly gone the way of the car. Now, the longer you own a house, the more likely it is that you are going to get less than what you paid for it. Therefore, instead of slowly increasing your net worth, owning a house slowly decreases your financial situation. It becomes much harder for the average person to better him or herself financially, and more and more people try to sell their homes before they lose too much money. Thus, the “sell my house” in the phrase “I want to sell my house now” is not the key part. People have always wanted to sell their homes. The key word is “now”. People are finding that they lose less money the faster they sell their homes. Written by N. Big
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The Brenton family house went on the market in November, and sold in January — 11 months after their mom's death.
Next week: MaxSold's founder shares tips on how to clear a house and how much the average household of stuff is worth.
Syndicated columnist and speaker Marni Jameson is the author of "House of Havoc" and "The House Always Wins" (Da Capo Press). Contact her through marnijameson.com.
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