Rod's Blog

A qualified “Not so bad, thank you”. 

While much of the national real estate scene has been experiencing an oversupply of houses and tumbling prices, the southern tier of Western NY State is having no such troubles. That bursting bubble that iced so many former hot markets just didn't occur here. Out values, overall have remained stable, and in some cases, values are increasing modestly.

But let's not be too smug about our steady and stable market.  The truth is, in some markets that went up, say, 100%, and then dropped 20%, property owners were still way ahead of us in terms of equity gains. Here's an example of the “bubble market” math: over a period of 4 years, a $100,000 property increases to $200,000, and then drops 20% in one year (a $40,000 decline) to a current “depressed” value of $160,000. This is a still a gain of 60% over 5 years. This increase in values might have occurred over a period where our values might have gone up 10, 20 or 30%. Plot our values and theirs on a graph over a long time horizon and you'll probably see that most of the "bubble market" property owners are way ahead of us Western New Yorkers in equity gain.

The evening news highlights those unfortunate folks who are getting clobbered because they bought at peak market, then were compelled to sell for any number of reasons (divorce, job loss, job transfer, etc) during a declining market. 

I think we Western New Yorkers will continue our steady sales and stable to modestly increasing values.

Still, I am convinced that many of the high profile "bubble markets" (like California and Nevada) will stabilize soon and will ultimately resume the trend of strong appreciation in values that far exceeds the pace of appreciation here in Western NY State.