Comments on: Quick Tip on Figuring Out A Home's Value http://thewisebuck.com/2010/02/07/quick-tip-on-figuring-out-a-homes-value/#utm_source=feed&utm_medium=feed&utm_campaign=feed Personal finance tips, debt help, ira roth ira, savings interest accounts Mon, 06 Feb 2012 01:41:06 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Edwin http://thewisebuck.com/2010/02/07/quick-tip-on-figuring-out-a-homes-value/comment-page-1/#comment-250 Edwin Tue, 09 Feb 2010 02:01:36 +0000 http://thewisebuck.com/?p=914#comment-250 There are many things contributing to the overvaluation. The mentality of prices going up continuously, the cultural push to own a home, the push by the many institutions profiting from sales and even the psychological urge to "build equity". Agents are generally there to make a buck, which means they want all houses to sell for more as they get a fixed % of sale and could care less about whats best for the buyer. Until prices reflect true value more people will go to renting. There are many things contributing to the overvaluation. The mentality of prices going up continuously, the cultural push to own a home, the push by the many institutions profiting from sales and even the psychological urge to “build equity”.

Agents are generally there to make a buck, which means they want all houses to sell for more as they get a fixed % of sale and could care less about whats best for the buyer. Until prices reflect true value more people will go to renting.

]]> By: mosullivan http://thewisebuck.com/2010/02/07/quick-tip-on-figuring-out-a-homes-value/comment-page-1/#comment-249 mosullivan Tue, 09 Feb 2010 01:56:21 +0000 http://thewisebuck.com/?p=914#comment-249 We had a major bubble here in FL. Now, some 3 years later the foreclosures are piling up and prices are falling. So, a lot of people that bought 6 months ago are now saying "Why didn't I wait?" because someone across the street bought the same house for 15% less. If they just applied this little principle. I've learned or at least it seems that most people are very reluctant to accept the 100-120 multiple. Why? Because it's hard to admit that most of that equity was fictitious. It's really hard to find a real estate agent who will act as a fiduciary. The "good news" is that the younger generation will actually be able to buy a home now or soon. We had a major bubble here in FL. Now, some 3 years later the foreclosures are piling up and prices are falling. So, a lot of people that bought 6 months ago are now saying “Why didn’t I wait?” because someone across the street bought the same house for 15% less. If they just applied this little principle. I’ve learned or at least it seems that most people are very reluctant to accept the 100-120 multiple. Why? Because it’s hard to admit that most of that equity was fictitious. It’s really hard to find a real estate agent who will act as a fiduciary. The “good news” is that the younger generation will actually be able to buy a home now or soon.

]]> By: Edwin http://thewisebuck.com/2010/02/07/quick-tip-on-figuring-out-a-homes-value/comment-page-1/#comment-248 Edwin Tue, 09 Feb 2010 00:22:54 +0000 http://thewisebuck.com/?p=914#comment-248 It seems so rare that people actually consider the fundamentals like you're doing here. The housing bubble was based in large part by the fact that people like your agent hyped up the price by comparing to other houses rather than a good baseline and they are still doing the same thing even now. While ignoring the fundamentals, people assumed that there was no bubble because the housing market was perfectly efficient since the prices seemed to be very reflective of the value. To illustrate this it is said that if a 28 oz. bottle of ketchup sells for exactly double the price of a 14 oz. bottle, the market must be perfectly efficient yet nowhere in that pricing is the true value of that bottle. Anyway, this isn't exactly on topic but I was thrilled to see someone writing about the fundamentals of pricing for once. It seems so rare that people actually consider the fundamentals like you’re doing here. The housing bubble was based in large part by the fact that people like your agent hyped up the price by comparing to other houses rather than a good baseline and they are still doing the same thing even now.

While ignoring the fundamentals, people assumed that there was no bubble because the housing market was perfectly efficient since the prices seemed to be very reflective of the value. To illustrate this it is said that if a 28 oz. bottle of ketchup sells for exactly double the price of a 14 oz. bottle, the market must be perfectly efficient yet nowhere in that pricing is the true value of that bottle.

Anyway, this isn’t exactly on topic but I was thrilled to see someone writing about the fundamentals of pricing for once.

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