Home sellers are spooked by the lowering prices of their homes. While homes on the market may still get some interest, it is not good. If an offer does come in, it is usually a low ball one. This is due to at least three reasons. One, the busted housing market is all over the news, so home buyers know that they have a lot of power; two, there is a lot of inventory out there, so buyers feel confident that if they walk away there will be many other homes to buy; three, buyers are concerned with the rising cost of gas and food and realize that they need to save money wherever they can.
While these low ball offers may not seem fair, they are a reality in the housing market. The average home sale price across the country has gone down by 13 percent. And in some areas, such as in big cities, that number may be as high as 20 percent. Analyst predict that before things get better, they will get worse, with prices dropping an average of 25 percent in comparison to two years ago.
While this might not affect you too much if you can afford your mortgage and are planning on staying in your home for a good length of time, it can be a blow to realize that the equity you thought you were building up is now gone. This could also affect your ability to open a home equity line of credit or HELOC. In some cases, even existing home equity lines of credit may wind up being canceled by your lender, since many of these contracts have clauses that state that if the value of your home decreases, the lender has a right to terminate the credit.
Check back later today for information on the real estate “short sale.”
Mary Ann Romans writes about everything related to saving money in the Frugal Blog, technology in the Computing Blog, and creating a home in the Home Blog. You can read more of her articles by clicking here.
Related Articles:
Can’t Sell Your Home? Here Are Some Options
5 Things to Do to Sell Your House Fast!