January 11, 2023
It’s natural for people to be concerned that they’re buying a house when prices are at their peak, and people worry about that in almost any market. So when you start hearing news about the market shifting, and home prices coming down, you might wonder if your house is worth less than you paid for it (if you bought it in the past couple of years).
It can (and does) happen. And it varies greatly by where you are located. In general, real estate values aren’t on a constant upward trend; they do take a dip here and there. But overall, the value of your house will appreciate over the years, despite some dips. So, unless you have to sell when prices are lower than you paid for your house, you can always just wait for the market to bounce back before selling.
The good news is that while prices have been adjusting down in some areas, they haven’t been falling drastically. In fact, home prices are only predicted to decline 4% in the coming year, as this Yahoo article states. Considering how much appreciation many homeowners gained in the past few years, that would mean many homes will still be worth more than when they were purchased. In the Mammoth Lakes Area, home prices are over 2021 highs for both condos and single family home (check out the latest Mammoth Lakes Market Update).
So, for the most part, you don’t have to sweat the news that prices are coming down.
However, it can be an issue if you find yourself in a position where you’re unable to pay your mortgage and your value has dropped. According to this article from First Journal Tuesday, mortgage delinquencies have been on the rise recently. They increased from the recent bottom of 2.75% homeowners (at least 30 days behind) back in May 2022, up to 3% in November.
That’s not a huge increase, and it’s still fairly low, but if you find yourself in that percentage of people, it can be scary and concerning.
When people find themselves behind on mortgage payments, there can be a tendency to wait until it’s too late to deal with it. Just hoping things will get better and resolve themselves is not the best approach.
Here are some things you can do if you’re having trouble making your payments:
Whichever route you choose if you’re struggling to pay your mortgage, the key is to do it sooner rather than later to avoid getting too far in the hole with your lender, or before prices potentially drop further than forecasted.
While there’s a lot of news about home prices falling, the forecast of a 4% drop in the next year shouldn’t be an issue for most homeowners, even if they bought in the past couple of years.
But there is a slight uptick in the number of people who are at least 30 days behind on their mortgage payments. If you’re one of the 3% of people who are delinquent on their mortgage, make sure to discuss the issue and potential resolutions with your lender. Or, if they aren’t willing to cooperate with you, consider selling your house. You might find that you could make a profit considering how much homes have appreciated in the past few years.
Stay up to date on the latest real estate trends.
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