This 2BR featured in the New York Times is on the market for $425,000.
Every week I read the New York Times “Property Values” column. The column features three properties throughout the country each week that are on the market for the price listed. “What You Get For… $250,000,” for example, vs. “What You Get For… $450,000.” But having watched homes of different prices and sizes be listed each week, I have come to one clear conclusion: location is everything.
During one recent week, I watched some 3-5 BR homes discussed for under $300,000, but this week, the homes listed were 4BR, 2BR, and 1BR… all for $450,000. Clearly location is at play. A 1BR in a high rise in Midtown Manhattan will almost certainly cost more than a 1BR in Lancaster, PA. A 3BR in Orange County, CA will likely go for more than one in Seattle, WA or Des Moines, IA.
When considering a reverse mortgage, location also comes into play because property values in some areas are higher than in others, as the above indicates. Some places have been hit dramatically by the burst of the housing bubble, while others have not seen their housing prices drop as steeply. Foreclosures and underwater mortgages are more common in California, Florida, Arizona, and Nevada than in most places in the Northeast.
It is a good idea to have a sense of how much your property is worth when using the reverse mortgage calculator and when evaluating your options. You may find that sales in your market are going strong and your home has not lost much of its value recently. However, you could also find that the reverse is true, is many are throughout the country.