An Honest Look at Value

During my layover in Minneapolis this past weekend, I read an article byKenneth Harney in the Washington Post regarding a realistic look at the housing market. I don't agree with everything he says in the piece, but the appraiser in me certainly can identify at times with his cynicism, which many might even call realism. He says, "Prices are headed south." I take a little bit of issue with this remark. I think it's fair to say that the current rate of appreciation is not what it was in the past few years, but saying that prices are falling is a bit too decisive. After all, such a phenomenon really will only affect the segments of the market that either are being forced to sell their principal residence in a relatively short time span after their initial purchase, such as those who buy & sell a piece of real estate within a two year time frame, which usually means the possibility of taking a loss no matter what the market, as well as those who are still speculating on big gains for no other reason than the "this market is SOOOOO HOT!" approach. Sellers under typical motivation will be largely unaffected by the slow down.