Zillow leaked some survey results today showing that 77 percent of homeowners polled nationwide said they believe their home has held or increased value in 2007, despite all the news reports of the sagging market, credit crunch and depressed values.
Let me state this once more: your home is not the only home in the Valley that has held or gained value in 2007. Your home has lost value, on paper, just like everybody else's.
I have some new potential clients who jokingly begged me for a little bit, any little bit, of good news about the Valley's real estate market. <Shoutout to you, Garrett & Donna Terberg!!!>
Here it is - the good news: You can stay happily in denial about the current market value of your home unless you absolutely, positively must sell or refinance. Believe whatever you like about how much your home is worth. Believe it's worth exactly as much as the highest price any of your neighbors got when they sold back in the boom-boom days of early 2005. Believe it's worth more if you like. Unless you need to get out of your house, or get money out of your house, it really doesn't matter what the current market value is.
Here's a little more good news: if you're a home buyer, today just might be an excellent time for you to buy. With average prices down about 6% to 12% around the Valley, and mortgage interest rates at lows we haven't seen in years, homes are more affordable than they've been in ages. I'm still hearing about mortgage rate locks in the mid- to high-5's. On the average loan of $250,000 a rate drop from 6.25% to 5.25% will save the buyer $159 a month! That's some serious savings.
My favorite in-house mortgage lender (Kristi Collins of Coldwell Banker Home Loans, 602-750-8594) told me that last week for a couple of hours in the morning on Thursday, buyers could lock their rate at 5.00%.
When selling or refinancing you should care very deeply about the current market value of your home. If you're just living in your home and loving it, stay in denial.