Have you noticed the rise in house values over the past few years? In 2011, the value of houses were at their all-time low. Many people were still skiddish about buying at that point (and still are today actually), but thankfully I was not one of these people that simply watched an waited. I bought a home in August, 2011 and am continually thankful and elated that I pulled the trigger when I did.
The Rise in My Home Value
When I purchased my home, its value was approximately $85,000 and had many repairs and updates that needed to be made, but just a year and a half later I had pretty much everything renovated just how I wanted it. Again, fortunately for me, as I continued to work on the house, the housing market continued to rise as well. So, not only was I adding equity by updating the bathrooms and refinishing the floors, the general housing market lifted the value of my house too!
When I closed on this house in 2009, I paid about $78,000. I honestly have no idea how much money I put into it (maybe $15,000?), but after perusing Zillow yesterday, I was pleased to see that they estimate my house value to be $113,000 (and typically Zillow has low estimates for my area)!
Will I Sell Soon?
So, the next question is, “Will I buy low and sell high?”. In other words, would it be a good time to sell now? Well, it certainly is a seller’s market right now (in my area at least). I have heard many stories recently about people putting their houses up for sale and finding buyers in less than 48 hours. There aren’t that many sellers in the area, but there are certainly a large number of buyers, which is driving up home values and giving sellers quite a lot of incentive to put their homes on the market.
I, however, am not that motivated to sell. Sure, I could probably sell my house for $129,900 and walk away with a lot of cash in my pocket, but who’s to say that I can’t do this five years from now? And maybe I could even sell it for more money at that future date! The main reason I’m not in a hurry to sell is because of my love for my home and the neighborhood in which it resides. My house has absolutely everything I need and is within walking distance to my workout center, doctor, dentist, pharmacy, the park, the hospital, and the downtown farmer’s market.
Chances are that the housing market will not collapse anytime soon, so there is no reason for me (or you) to rush out and stick that for sale sign in the yard.
Is It Too High to Buy Now?
In about one year, I will likely be buying up some properties to rent out, but I am getting a little nervous about these rising house values. There aren’t that many deals for buyers these days, so should I even be looking? Well of course! Since I don’t believe that the housing market is going to take any more plunges in the near future, it is still safe to buy, but I still want to find a relative deal compared to the current home prices. I’ll just have to do my research and look through hundreds of houses to find the perfect one. There really isn’t any rush though, so I don’t feel pressured.
Ideally, I would like to buy a semi-fixer upper that many other people shy away from. I can then buy the house at a severe discount and do much of the work myself, which will add large amounts of value to the house for a small cost. At this point, I would rent the house out (while still living in my current house that I love) and start looking for the next deal. To find a real gem, it can take about a full year of intense searching. This will allow me the time to save up the cash and then make an offer with confidence when the time is right.
Are you looking for a house or considering selling? What is your take on the current housing market?
Here are some great reads from this past week. Enjoy!
How Difficult it it to Get a Mortgage Nowadays? Brutally Difficult and Extremely Painful – by Financial Samurai
No Bake Protein Balls – by Budget for Health
Do You Throw Your Ethics Away to Save Money? – by Money Manifesto
The Real Cost of Mutual Funds – by Penny Thots
Likability Will Help You Succeed in the Workplace – by Wealthy Turtle
Fix Your Own Brakes to Save Money – by Financial Excellence
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.