During a real estate boom, we get used to tacking maybe an additional 20% to the value of our home each year, and sometimes even more. In a few years, we begin to assume that this is the way it should be and, indeed, this is the way it will always be. But it isn't.



The real estate market goes through cycles. When you notice that the market value of your home has risen so much that you yourself could no longer afford to buy the home, you see problems in the making. Someone like you can't buy your home. Who can? Who will?



Though the purchase of a home is usually based on a complex set of emotions, the fact remains that the property is a commodity. Just like a car whose design makes you imagine feeling like king of the road as you cruise the beach highways, a spectacular home may seem to be worth far more than its plainer counterparts in the neighborhood, but nothing will erase several very basic facts about your local real estate market. Values in that market are interdependent.



A very crucial step in putting your home on the market, therefore, is to get as real as possible about your home and the micromarket in which you will sell it. Whether it is a Kia-style tract home or a Porsche-style beachhouse, you really can't evade the market in which your home is selling. Your home's market value is primarily determined by what similar nearby homes are selling for in today's market, not on wild emotions.