HOME VALUES GO UP AS HOME TRANSACTIONS GO DOWN

It is a well known saying that “what goes up also comes down”.  For many years that was not a saying which applied to residential home valuations.  Historically, when the economy was soft, and the housing market experienced a “down market”, that which went down was the number of home sale transactions.   However, even as home sale transactions went down in down markets, home values did not.  Home values “flattened out” during those down markets but homeowners did not see a loss of equity.  That all changed in 2006 when the so called “housing bubble” burst.  For the first time in generations, homeowners experienced the pain of lost equity.  Some homeowners lost a great deal of equity, and realized that it is indeed true that “what goes up also comes down”.  However, it is also the case that one thing goes up as a direct result of another thing coming down.  In the Wall Street Journal article seen in the included link, the present increasing valuation of homes is directly linked to the decreasing number of home sales (i.e. transactions).  The decreasing number of transactions, of course, is directly the result of few homes being available for sale on the resale market.  Check out this link and don’t forget to contact The Zwahlen Team. Now is a great time to buy or sell.