5 Things That Aren’t Worth As Much Money As You Think


How much money is your stuff worth? Chances are, you think your possessions are more valuable than they actually are. Economists even have a name for the phenomenon: the endowment effect. Whether it’s a car, a stock or a stack of old books, people tend to assign a greater value to items they already own than they would if they didn’t already have a vested interest in their worth.

You can see the endowment effect in action every day on television. Take Pawn Stars, where eager, if somewhat deluded, sellers often value their collectibles at three or four times what the pawn shop’s owners think they’ll sell for. Or just browse the listings on Craigslist, where you can usually find people offering everyday household items for nearly as much as you can buy them new. These people may seem greedy, but in reality they might just be harboring a mistaken idea about their item’s value.

Most of us aren’t immune from misunderstanding how much our stuff is really worth. Who hasn’t tried to sell an item only to be disappointed when you couldn’t get your asking price, assumed a family heirloom has monetary rather than sentimental value, or held on to something useless — like comic books, Beanie Babies or old toys — just because it might be worth something someday? From real estate to childhood collectibles, here are five things you might own that probably aren’t worth as much as you think.

1. Your House

Housing prices keep going up, but that doesn’t mean your house is worth as much as you think it is. Homeowners typically overestimate their property’s value by around 8%, according to a 2015 study published in the Journal of Housing Economics.

Owners’ emotional attachment to their home might have something to do with the discrepancy between anticipated and real home values. People also tend to assume the renovations they made to their home add more value than they really do. In reality, homeowners rarely get back 100% of what they put into updating their property. Unique or custom renovations that are highly valued by a homeowner might actually drag down a home’s value.

“When you invest in truly customized upgrades … you might not get a quality return on your investment,” Colby Sambrotto, president of USRealty.com, told The Cheat Sheet earlier this year.

2. Sports Cards

In August 2016, a 1979 Wayne Gretzky hockey card sold for $465,000 at an auction in Atlantic City, N.J. The six-figure price might inspire you to get your own collection of hockey, baseball, or other sports cards out of the attic, but don’t expect to find a fortune in a dusty shoebox.

As with any collectible, sports cards are worth whatever someone is willing to pay. In many cases that’s not much. Just ask the guy who couldn’t find any takers for his lovingly assembled, 20,000-card collection. Though some old and rare baseball cards still fetch high prices, the market is nothing like it was at its peak in the ‘80s and early ‘90s. Your cards may have some nostalgic value, but unless you have a gem in your collection, you won’t be using them to put your kids through college.

3. Engagement Rings & Other Jewelry

The average engagement ring costs $5,871, according to wedding website The Knot, but if you want to sell your sparkly rock, you’ll probably get only a fraction of the original cost back. “Retailers mark [diamond rings] up so high, they depreciate as soon as you walk out of the store,” Ed Snyder, a certified financial planner with Oaktree Financial Advisors in Carmel, Ind., told The Cheat Sheet.

A used engagement ring may fetch only half of its original selling price when you try to unload it. Your other jewelry may not be worth much either. While prices for used necklaces, rings and bracelets can vary widely, getting more than what you paid for a piece is rare, Howard Rubin of the National Association of Jewelry Appraisers told The Los Angeles Times, and in most cases, you’ll sell at a significant loss.

4. Antique Furniture

The old dresser, dining table or secretary desk you inherited from your great-grandmother may look cool, but that doesn’t mean it’s worth a lot. Antique furniture isn’t in extreme demand these days, the Wall Street Journal reported, and would-be sellers are often disappointed when their “priceless” items turn out to be nearly worthless.

For one, the item you think is a century old may be a much newer reproduction or an outright fake, with a correspondingly low value. Genuine antiques may have been damaged or poorly restored, which also affects what they are worth. Finally, tastes have changed, and many buyers simply aren’t interested in bulky, dark wood pieces from the Victorian era or earlier. (The Economist reported, however, that mid-century modern pieces are a different story.)

5. Fine China

Like old furniture, fine china that’s passed down from generation to generation may have sentimental value, but you likely won’t get much if you try to sell. Lifestyles have changed, which mean younger people don’t often feel the need to keep an extra set of dishes around just for special occasions. They’re unloading older sets, but they’re generally not making much by doing so, especially if the pieces are chipped or otherwise damaged.

Unless your vintage china is very high quality or a rare pattern, you probably won’t find too many takers, Deb Lee, a professional organizer, told The Washington Post. An antique dealer can tell you whether a set is worth anything. If it doesn’t have much value and you don’t need it, donating it and deducting the value on your taxes may be your best bet.

This article originally appeared on The Cheat Sheet.  

Image: Cathy Yeulet

The post 5 Things That Aren’t Worth As Much Money As You Think appeared first on Credit.com.

The Worst Vote for Your Home Value: Trump or Sanders, Economists Say


In somewhat ironic news, real-estate-magnate-turned-presidential-hopeful Donald Trump would be bad for the housing market if he won the election, according to a new report. The same goes for a potential President Bernie Sanders.

Zillow, a real estate company, and Pulsenomics, an economics research firm, surveyed more than 100 housing experts on how the presidential candidates would affect the housing market if elected. The consensus was that a President Trump or President Sanders would negatively impact home value forecasts, housing finance reform and the U.S. economic outlook overall.

Pulsenomics questioned 107 experts between April 25 and May 5, a period in which Sen. Ted Cruz (R-Texas) and Gov. John Kasich (R-Ohio) suspended their campaigns for the White House. Still, the economists considered what both candidates could have done for the housing market and came to the conclusion that, had either been elected president, Cruz would have had a negative effect and Kasich a positive one.

With Kasich, economists’ most favored candidate, out of the race, the presidential hopeful with the next-best economic outlook was Hillary Clinton. The panelists generally viewed a Clinton presidency as one that would positively affect forecasted home values and housing finance reform, and have a neutral impact on the economy overall.

The report didn’t offer much detail on the reasons for the economists’ assessments, nor did it explain how the economists were selected for the survey.

“The results from this survey show us that, from these economists’ standpoint, the more centrist candidates from either party would be best for the economy and housing market,” Terry Loebs, Pulsenomics founder, said in a press release. “Respondents saw the more polarizing political leanings of Donald Trump and Sen. Sanders as having a negative effect.”

Some panelists said Trump’s “inconsistency on policy, unpredictability as a candidate and lack of political experience” drove them to say he’d negatively impact the housing market as president. Panelists looked even less favorably on Sanders, whom 59% believed would somewhat or very negatively influence home value forecasts. (Forty-nine percent said the same of Trump, and 29% felt that way about Clinton.)

Election years always bring on feelings of uncertainty, which is why homeowners should keep tabs on their estimated home value, no matter who’s running the country. Home value can affect your property tax bill, which in turn can impact your housing budget, your ability to pay back your mortgage, and your credit score. (You can view your free credit report summary, updated monthly, on Credit.com. And, if your credit is in rough shape, you can potentially improve your score by disputing errors on your credit report, paying down high credit card balances and limiting inquiries in the short-term.)

Property value is also important to monitor if you consider selling your home — and plan a move to Canada in November.

More on Mortgages & Homebuying:

Image: andykatz

The post The Worst Vote for Your Home Value: Trump or Sanders, Economists Say appeared first on Credit.com.

Living Near These Stores Can Make Your Home More Valuable

make your home more valuable

If you’re looking for an edge in buying a home that will appreciate in value, Zillow researchers may have found just what you’re looking for.

The real estate website recently analyzed the values of millions of homes near dozens of Trader Joe’s and Whole Foods, finding that these grocery stores and higher home values are definitely related.

Specifically, Zillow found that homeowners saw their values increase more rapidly if they were closer to one of these grocers. Between 1997 and 2014, homes near the two grocery chains were consistently worth more than the median U.S. home. By the end of 2014, homes within a mile of either store were worth more than twice as much as the median home in the rest of the country, the analysis found.

Of historic and anecdotal note, the original location of Whole Foods in Austin, Texas, is now a Goodwill thrift store. The surrounding neighborhoods remain some of the city’s most expensive. At the time of this writing, a two-bedroom, two-bath condo unit just up the street was listed for $899,900. According to Zillow, the median home value in Austin is $290,300.

Trader Joe’s original store on Arroyo Parkway in Pasadena, Calif., is still in operation. At the time of this writing, a two-bedroom, two-bath condo down the street was listed for $778,000. According to Zillow, the median home value in Pasadena is $710,000.

“Like Starbucks, the stores have become an amenity in their own right – a signal to the home-buying public that the neighborhood they’re located in is desirable, perhaps up-and-coming, and definitely improving,” said Zillow Group Chief Economist Stan Humphries. “Like a self-fulfilling prophecy, the stores may actually drive home prices. Even if they open in neighborhoods where home prices have lagged those in the wider city, they start to outperform the city overall once the stores arrive.”

The Starbucks Effect

About a year ago, Zillow did a similar analysis of Starbucks, looking at the relationship between property values and proximity to the coffee chain. That analysis found that homes within a quarter-mile of Starbucks increased in value by 96% between 1997 and 2014. The national average for that period was 65%.

Zillow’s analysis also found:

  • The median home within a mile of a future Whole Foods store appreciates more slowly than other homes in the same city before the store opens. In the months before the stores open, the trend reverses and flips, so that after the stores’ opening dates, homes near Whole Foods appreciate more quickly than other area homes.
  • Homes near future Trader Joe’s locations were appreciating at close to the same rate as other homes in the same city before the stores opened. After the opening date, however, Zillow found a clear boost in home appreciation rates. Two years after a Trader Joe’s opened, the median home within a mile of the store had appreciated 10 percentage points more than homes in the city as a whole over the previous year.
  • These two brands are obviously very good at choosing locations that will appreciate faster in the future, or are actually spurring home appreciation growth – or some combination of the two.

Remember, a good credit score can help make housing more affordable in any area since it generally entitles you to better rates on a mortgage. As such, it can be a good idea to check your credit before you apply for a mortgage. You can do so by pulling your credit reports for free each month at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.

More on Mortgages & Homebuying:

Image: iStock

The post Living Near These Stores Can Make Your Home More Valuable appeared first on Credit.com.