Is the Glass Half Empty or Half Full ?
Well, now we are hearing reports that homes in the San Francisco Bay Area have a 50% chance of going down in value. But wait, doesn't that mean that there is a 50% chance that they will go up in value? Better Odds than Vegas?
If we get to a point that we see only 4-6% per year value increases, is that bad? That would mean for every $100,000 of value could have an increase of $4000-$6000. If you had only put 10% down, that means you could have made $4000-$6000 on your $10,000 investment. Of course you do have to keep in mind that you financed the other 90% and you will have costs of financing to consider.
Perhaps we wont be seeing 20-25% increases in value per year, but that still does not mean that home ownership is not a good investment. May be we will just be getting back to the good old way of paying down your mortgage and receiving moderate value increases.