This & That By Ken Thiemann

Author’s note: All of the materials written in this blog are original and based on observations, research, industry knowledge or actual interviews conducted by the author. The intent here is not to undermine or criticize other writers or publications but to offer my viewpoint and outlook. Having been involved in real estate in one manner or another for over 36 years makes me uniquely qualified to offer my perspective. If other writers or publications wish to use any of my material, in part of in whole, please acknowledge accordingly.

Regardless of who says or writes what, the fact remains that sellers who need to sell and buyers who need to buy are matching up and closed sales are resulting. However, especially in those market segments, like new construction, where there is an enormous inventory of existing product, buyers can be selective in choosing the best value. But, where value is thought to be ‘in the eyes of the beholder’, the ultimate value of real estate, referred to as market value, is the result of an negotiated agreement between a willing selling and a willing buyer. Of course all parties have to have knowledge of the market and neither party can be motivated by duress. That’s basically the definition of market value.

As to the market itself, the medium price of single family residential homes, excluding condos, in Pierce County was up 1.84% over the same period ending October 31st in 2006. The medium price of condo units for the same period was down 8.24%. But, don’t overlook the bigger picture. On June 30, 2003, the medium price of a single family home in Pierce County was $181,035. That compares with the medium price of $279,950 recorded October 31, 2007, a staggering 54.64% increase.

When I started in real estate in 1972, we told buyers that they would have to hang on to their homes for at least three years in order to break even. It was simply a matter that the average appreciation in the 70’s was something less than 3%-to-5% per year. Of course back then we referred to it as inflation. The point here is, as the accelerated appreciation, maybe inflation, drops to more realistic average levels, the homeowner may have to plan to stay in a home for a longer period than what had become commonplace during the past 5-to-6 years. With this though, the question becomes ‘What’s the value of owning a home’ or, put another way, ‘Is there still value in owning a home?’

Of course, I believe the answer is absolutely yes, of course there’s value in owning a home, in owning real estate. Of course, my grandparents and parents owned real estate so, in my family it was a tradition to own your own home or rental property. For others though, how about we delve into that on another day. Until then, I hope you have a rich and rewarding day.