First Person: My Home Is Not Appreciating in Value

Yahoo Contributor Network

First-time homebuyers who bought at the bottom of the housing bust can certainly view their house as an investment. They might have cause to rejoice as home prices rise. However, for many of us who bought during the housing bubble, it's still about recovery. We may be a decade away from realizing any actual appreciation.

According to a recent article by Forbes, homeowners should rejoice because the housing bubble and bust is over. The article claims housing prices are now poised to appreciate with the inflation rate.

Timing it right

According to the article, the average home prices doubled between 2000 and 2006. As a fan of Zillow.com, I'm always curious to see how the housing market treated my friends in other parts of the country. One Generation-X friend purchased a home in 1999. She bought her house in Washington State for about $150,000. Now she is selling it for $300,000. Although it may appear as though she is coming out ahead, it all depends on where she moves. If she stays on the West Coast, she might not be able to find a desirable home for less money. If she were to move to Florida, she could pay cash for a fairly spacious home.

Going from renter to owner

Although my friend purchased her first home in 1999, I didn't make the leap from renting to buying until 2002. I bought a townhome for $103,000 before the housing bubble started in Florida. I sold two years later, making a profit of about $30,000. Since I put the profit from my first home into the purchase of my second home, it lessened the full impact of the housing bust. My $183,000 Florida home is now worth $130,000. However, taking the profit I made from my first home into the equation, I'm only down $23,000 instead of $53,000. I think the sooner a person switches from renter to owner, the sooner they can realize the long-term financial benefits of home ownership.

Having a permanent address

Although our home hasn't increased in value, we are glad to have a permanent address. We are happy to be stuck with our house even though the value actually went down by about $2,000 in the past month. With every short sale and foreclosure in our subdivision, our home value takes a hit. Although we never expected for this house to be our forever home, we are glad to skip the house hopping game and all the headaches of buying and selling.

Encouraging our sons to buy

Because interest rates are low and housing prices are still fairly low, it's a great time to become a first-time home buyer. We are encouraging our college-age sons to save up money for their first home purchases. The problem for older people who purchased homes at the bottom of the housing market is that they typically had to sell at the same bottom. Few older people I knew came out ahead. However, first-time home buyers have a great edge. They not only trade paying rent for paying a mortgage, but they can actually rejoice in having a home that's an investment.

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More from this contributor:

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