This is some counter-trend thinking that might help:
It appears that in the US, the fall in home prices has hit a temporary bottom due to copious amounts of government support and a halt in foreclosure sales by banks. Soon (months), the government support will end and this glimmer of stability will generate a stampede of banks to the exit. Further, strategic defaults will continue to rise as the business sense of the middle class matures beyond the naive.
However, all of this volatility masks a more important shift: the need for a home to be a source of value creation and not just an empty box. As D2 (the second great depression) meanders on, incomes will continue to drop, costs will continue to rise, systemic shocks will create shortages, and security will decline. In this environment, the factors that contribute to the valuation of a home changes.
Old model: Location, location, location. Basically, is the home located in a great school district? Is it within commuting distance to city? Is it close (but not too close) to public transportation (to the extent that is available)?
The problems with this model of valuation within the context of a long running depression and ongoing collapse are legion.
- Is the home located in a viable community? One that you could work with to solve problems as they emerge?
- Is there a strong tradition of entrepreneurship in the community such that it allows the fast formation of new ventures?
- Is the community defensible? Considerations include geographical footprint, proximity to cities, entry/exit, etc.
- Does the community have arable land available for food production? There are so many factors here, it would take a book just to explore them.
- Can the home produce energy? Does it have solar PV or solar hot water? Does it use geothermal heating/cooling?
- Does the home have sufficient space for or already mature gardens?
- Is the home's connection to the electricity grid bi-directional?
- Is the connectivity to the global network both redundant and fast?
- Does the home have room for a workshop?
- Are the real estate taxes low enough to avoid liens in the event of inevitable job loss (by at least one of the members of the household) or a reduction in pay?
- Lots more here. Suggestions are welcome.