Staying Calm When Home Values Drop

As the real estate market cools off across theThe gains you have made over the last five
nation, many people are getting nervous aboutyears or so appear to be under attack at the
reductions in the value of their property. There ismoment. Across the nation, we are seeing a pull
little reason for such stress.back on home values because of a cooling real
Staying Calm When Home Values Dropestate market. It is important that you don't
The real estate market can be looked at in twooverreact to this pull back. The gains you have
ways. First, you can look at the movements on aseen in the last few years were paper gains, to
monthly or annual basis. When doing so, you willwit, they did not put money in your bank account
see moves up or down and perhaps stressunless you pulled money out of your home. As
yourself out far more than necessary.home values cool, it is important to realize any
Alternatively, you can look at prices on aloss of equity is also a paper loss, to wit, you
long-term perspective of five years or more andaren't paying anything out.
predict where they will go based on historicalA map of real estate prices over the years would
trends in real estate. By far, this second approachshow a continual up trend. Yes, there are
is the way to go when it comes to viewing thevariations over a two to three year period, but
value of your home.the overall trend is an increase in property values.
Unless you live in Texas or Colorado, there is noThere is no reason to believe this will change
denying that you have probably seen significantanytime soon. The current pull back on property
appreciation gains on your home over the last tenvalues will pass and your home will start
years. The market has been about as hot as itappreciating again. It may take a year or two, but
ever has. Properties in Las Vegas, for instance,it will happen. Relax!
were appreciating at a staggering rate ofIf you are seeing a pull back on the value of your
twenty-five percent or more a year. A YEAR! Onhome, you should not sell unless there is some
paper, a lot of people became millionaires becauseother compelling reason. Practice patience and you
of the equity gains in their home. As always, suchwill see prices rise again in the near future.
growth could not be sustained inevitably.