I've been in my townhouse for almost 5 yrs and the values are going nowhere. the places are new, some are on a golf course (like mine) and the location is good (I think). There's a grocery store 2 minutes away. 5 mins from the highway. Good neighborhood attached. Problem is, everybody's selling, with very slow results. So what are some factors that would cause values to stagnate? Or have I just listed them and don't even know it...

 

Well, if everyone's selling, that'll definitely affect prices, even in hot markets. Las Vegas is currently going through that now, even though it's a hot market; everyone is trying to cash out. So, it's supply and demand. Where I am, it's the opposite -- no one is selling, the city passed a slow-growth measure and my house increased in value by more than 33% in two years. School ranking will also affect prices -- good schools will attract buyers. Interest rates are creeping up, making it more costly more to borrow money; this could price out marginal home buyers.

 

Intrest rates heading back up could be a factor...

 

I could only wish for a slow-growth measure. that's probably another thing - they are building like crazy all around. I cashed in on a crappy townhouse in a college town 4 years ago - definitely the demand factor there. guess I just have to wait. btw, townhouses for sale on the golf course here for a buck twenty or less. come and get it.

 

location is the biggest factor. most real estate in the northeast has gone up significantly within the past 5 years. down south the growth seems alot slower for some reason.

 

If there is plenty of new development and the prices are comparable to existing homes, what advantage does your porperty have over the newer developments? Probably not many. Most of the areas that are appreciating above average are in land limited areas. Another thing that will affect prices (other than those mentioned above) is employment opportunities. If there aren't many job opportunities in the area, it will keep people away.

Why are people moving out of the area so fast to begin with?

 

In Portland we have a slow-growth measure. It's called the "Urban Growth Boundary". Basically you go from medium density townhomes/condos on one side of the street and a Christmas tree farm on the other.

They just released the next phase of the UGB past North Plains. It gets seriously built up in the next years, I sell my older house with raised property values, although into less of a seller's market.

 

Of that I'm not sure. I think unfortunately a lot of them see it as temporary, that they can turn around and sell it quickly for a small gain. Which of course isn't happening. Most of the residents are young, maybe newly married. A townhouse as a first home is a great idea but you can't expect to sell it in a year and get all your money back.

I think a lot of the builders around here entice, whether they mean to or not, first-time buyers who don't understand the whole picture.

 

Demand can be high, and prices can still grow slowly. This is probably because the supply continues to meet the demand. Like you said, they are building all over, which leads me to believe that there is a good deal of land to be had and developed.

In the Northeast, the amount of available land in many of the metro-areas have long since been gobbled up, therefore supply is limited and prices are driven through the roof due to the high demand for housing. A 3 bed, 2.5 bath colonial, 2000 sq ft, on less than half an acre in my town now runs in the $400k range, and that is considered a very good deal in Eastern MA. These areas have seen 10%+ year over year appreciation as well. It's a perfect example of what happens what you have alot of people who want a house, but not a whole lot of houses to go around.