(CHEROKEE LAKE REALTY WRITES A WEEKLY COLUMN FOR THE GRAINGER COUNTY JOURNAL NEWSPAPER. THIS WAS A RECENT QUESTION ASKED BY A READER.)
You have not provided any information on your house for me to make an educated guess. But, even if you had provided more information, I will tell you this is probably one of the most difficult questions to answer in real estate. There are too many unpredictable factors that will impact pricing from year to year. Since 2001 U.S. housing values have increased by an average of 3% to 5% per year. That’s an average. Some years values have been higher, some years they have been lower. When adjusted for inflation the real increase in value has historically averaged around 0.5% per year. The condition of your home, location, and what you paid for it will influence how much your home’s future value will be. What if you paid asking, or even above asking price, when you purchased it during the boom years? It may be difficult for you to have a hefty increase in the value of your home. There is a saying in real estate, you make money in real estate when you buy, not when you sell. In other words, if you purchased at a low price, you will have a greater profit than if you purchased at the high end. Geo-political factors will also affect values. Let me throw out some dire examples of what could impact values negatively. What if we get involved in a major war? Think Russia, Iran, something besides a skirmish in Venezuela. Countries that have nuclear capabilities. Wow. Housing may be one of the last things we worry about. What if for whatever reason, political or otherwise, interest rates go up dramatically? That will take a good percentage of people out of the buying equation. Do you think that will affect pricing? Absolutely. I know your question did not ask for a return on your home investment. But the longer you’ve stayed in your home the greater the return. If you purchased your home last year, and wish to sell it right away, it may also be difficult to have a decent increase in value.
So, my advice? If you have decided that you want to sell and today’s market conditions will allow you to list your home at a favorable price, with a favorable return, go for it. Because we don’t have a crystal ball and there is no telling what the future holds. Hope this helps, and if I can be of further assistance, please let me know.
