How much is a home really worth

How much is a home really worth? There’s a lot of things going on right now and we’ve seen home prices appreciate and go up, go up, go up that Shana Acquisto. She’s a luxury real estate broker. We’re going to totally dive in to what is the real value of a home?

Is today’s market value or is it a lot more, a lot less? And I’ll give you my true opinion on it.

This is good. Pay attention. That’s a lot to live up to. But in talking about this? Just just think for a moment, how long is the home going to be there? Ok, so imagine you put a value on a home. And let’s say, for example, that the home is half a million dollars. Yeah, and that’s what somebody is going to pay for it.

So Shana and I are going to buy a home. Here is a is a combined married couple in the homes can be worth five hundred thousand. Today’s current market value? Well, we’re going to have a payment on it. And if we mortgage it right, but then we’re going to be able to live here for how long.

So what is the real value of that? And as you look at it, I think we look at things on maybe the wrong time scale shortsighted. Yeah.

So let’s really think about it. We’re always looking at today, today, today,

But there’s a longer term because people move so often. Well, look at what it really is worth in a different context. So let me explain how much would this home be worth if it was something that we planned on living in for the rest of our life and we planned on our kids and their kids, our grandkids, eventually living in the home and it was passed down for generation after generation.

So America is relatively a young country. Mm hmm. But think about from a European perspective and imagine that you think through how old some of these buildings are. 

Have you ever been to Europe and went around and you start going to these places in these castles and these buildings? And the building was built in whatever time frame and you’re like, America wasn’t even like Columbus didn’t even show up here before that building was already there, and it’s still being used. Mm hmm. So imagine if the structure is now still there for not just 10 years, 20 years, 50 years, one hundred years, two hundred years.

You might have to do some maintenance and upgrades to it over time. Sure. But this is still there, and in the end, you still sell it. Right, there’s still a value on it at the end. Plus all the use, all the time, that really goes with it.

So for that one reason, I think home prices are way, way undervalued, dramatically undervalued because at the end, you’re still going to own the physical real estate under it, the dirt. Sure. Right now and then there’s a structure upon that. So think about this. You own it. You don’t rent it.

You own it. And that’s where the real value is. And I would argue that homes might be way undervalued by a factor of they might be worth 10 times as much. Imagine if you went back and were able to collect all the money that any one of those European properties had over the last five hundred years. Or to take the land that’s still there,

I mean, they do a typical mortgage 30 years, right? So I mean, that’s a long time.

It is, but it’s really not in terms of how long that whole shebang is. Like, no problem, 30 years. They’re saying,

Yeah, you know, there’s a useful life of a home now on how it’s constructed because it’s not made out of these different materials. But like what really happens to cars are made of brick.

Yeah, it’s a fine construction. Are they going to be here in 50 years? Yes. Are they going to be here in one hundred years? Sure. With like a little bit of effort. Is it still going to be close to the city?

Is it like whatever? Should it be worth a lot more? I think so. I really do. And I think homes are dramatically undervalued for that perspective.

So everyone thinks, Oh, these home prices, it’s ridiculous. Say, You know what?

You change your perspective. Change their perspective. I mean, it’s just a totally different way to look at it. It is. And we look at it through this short term lens because at the end, you’re still going to sell it and you’re going to get that. Plus, you had the opportunity to live in it for all that time.

You’re going to rent it or you’re going to you. Yeah, there’s still about it is right.  

And if something happens, then you still have the dirt. You’re going to have insurance to repay for whatever the structure was. It might be outdated, but it’s still going to be there as long as you continue to put maintenance and it’s going to be totally fine. I think homes are worth a lot more than they’re currently being valued at.

So if you’re a homeowner, be proud. Just buy more, just buy more. Yeah, because Mike said it’s worth ten times that number. Does that make sense?  

Yeah. Yeah, it does. It does. I don’t know how people will perceive it as that because they’re in the mindset of the current all the time we live in the moment.

No, I’m making a push that homes are worth 10 times what they are. So I’m on record.

Ok, well, maybe you can figure out how people can go get loans for it?  Well, they would. They would. So what they would get is a loan for the useful life of that property and then that would get transition to something else.

I bet you that there’s a large institutional buyer out there who would follow my same logic, but they only get to lease the home similar to like a car and you use just a portion that you plan on using so you can get a 30 year lease of your home and that the other company actually owns the underlying asset.

Similar to how it works, when you buy a property, you don’t have mineral rights. Those are gone. Right, that portion is gone. I think that you’re going to get to a situation where they they modify how it’s all done and you only get the useful life or 30 year ownership on it.

And eventually somebody else owns all these other things. It’s like a land lease for ninety nine years, encroaching on.

Episode Links

Columbus , America, home prices appreciate , Mike Acquisto , Shana Acquisto , TNT 

Episode Recorded Live on YouTube 03.01.22

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