The only true value your home has is its worth to you, or its worth to a buyer: in other words what someone is willing to pay for it. Property prices fluctuate with market conditions and there are many variables when considering its actual worth. To determine the current value the usual method is to have three independent valuations done and take the median figure, and compare your own property to comparable ones in the area. Depending on where you live these valuations will be free from local estate agents or charged for by real estate agents. In addition the mortgage company can offer a valuation.
Variables come in many forms though. If the assessed worth of your home today is $200,000, how much would it really be worth if the property suddenly became uninsurable due to flooding? Not only would the market value of your property immediately fall but it is unlikely you would ever find a buyer even at half its original valued price.
If you are trapped in a property which currently has negative equity does that make your house of any less worth to you if you are not intending to move? The paper price will fluctuate and the situation will most likely be temporary. The true value of your home may well be less than the current mortgage you are servicing, but the long term growth potential is still there.
Ideally everyone wants to see the paper value of their home grow as it represents an increase in the asset held. However when prices are artificially inflated during housing booms this can be bad news for the home owner who is staying put, as property taxes will rise based on the inflated valuation.
There are variables too which may depress the price of your home and cause you to see a continual fall in its value which it may never recover from. Often when areas change due to populations becoming transient, values may never recover. What was once deemed a good neighborhood can be dragged down by neighboring foreclosures, or an increase in rented homes due to investors buying up properties as buy to lets. Neighborhoods which boast a higher percentage of owner occupiers will invariably be better tended than those which have more transient renters.
There will always be good locations where prices continually rise, as these are the sought after locations which others aspire to move to. Solid, safe communities with low crime rates, good schools and excellent transport links, will increase at a rate which allows the home owner to quickly build equity. Vacation spots also typically appreciate at above average rates, having the downside of making the areas unaffordable for local youngsters, forcing them to move out of the area if they want to purchase a home.
The true value of your home is what someone will pay you for it today. If you have buyers competing to buy your home for more than its assessed value then you can sell it and realize its actual value.