If you are worried about real estate values dropping, you need to take a deep breath. Yes, the market is cooling off fairly dramatically. This is not is a sign of impending doom for homeowners. The real estate market goes up and down all the time.
You can look at short period of times and draw all the wrong conclusions. If you looked at just the last five years, you would think that real estate always appreciates at double digit rates on an annual basis. If you looked at the market in the late 1980s, you would swear real estate is the worst investment given the flailing market at that time. Of course, neither short term picture is correct.
The simple fact is real estate has historically been a good investment over time. Yes, we are heading into a cooling off period, but the market will come back. It may take a couple of years or it may take ten. It really does not matter because you will still be building equity in your home by making your mortgage payments. Once appreciation takes off again, you will be in very good shape indeed. If all else fails, you have a place to physically live!
As you can probably tell by now, my recommendation is that you do not sell solely because the market is cooling off. There may be other reasons you feel you need to sell, but do not do it just because appreciation is slowing down.
The only exception to the above advice has little to do with the real estate market and everything to do with mortgages. There are a lot of creative mortgage products on the market these days, to wit, zero interest and low initial payment balloon loans. If you have one of these, you need to evaluate whether you can ride out a dip in the value of your property.
