We sold our first house for 1.3X what we paid for it almost 5 years after buying it in 1995 and bought House1 in a quieter, nicer area. House1 was our castle for 18 years, and then it was time to say goodbye to it at about 2X what we paid for it. Those are just the sale price numbers; I am not counting what we paid for all of our landscaping materials… other than the giant tree removal, ALL labor was just the two of us. Now, Redfin says House2 had appreciated 20% since we bought it 2.5 years ago. Thank goodness we did not buy the townhouse where kiddo lived and waited a bit. We would have bought at the peak of the market (May 2018), and the place was not that great.
I bought my current apartment in 2013 and it has not appreciated much.
We’ve been in our house 21 years – has appreciated 2.5x. Market value dropped about 15% in 2008, but recovered relatively quickly (MD suburbs of DC). The big change has been that for people who renovate prior to selling, it’s now possible to break the hard barrier that has always existed in this area (starter homes, 50+ years old). What I’m observing is that the folks who are spending $$ to renovate and get that higher sales price are barely breaking even vs. what they spent on renovations. This will definitely inform decisions on what and how much to renovate should we ever move.
Rents in this area have gone NUTS. The 1900 sq ft townhouse we rented in 1998 before buying this house went for $1450/mo. It now goes for $2800-3200. Renting a room in a house in our subdivision goes for $1000/mo.
As for other parts of the country – my sibs in KY and GA have not had much appreciation in home prices. In GA, they are still a little down. Sales are slow. In KY (an hour outside Louisville), prices have gone up modestly but the market is more brisk. My sister’s house there is 1/3 the price of mine – same sq ft, same 1./2 acre lot.
This thread sparked my curiosity. We have been transferred a lot and just purchased our 9th house. I looked up all of our former houses starting with the 1st house we sold. Not a single one has been sold since. That boggles my mind since we have never managed to live is a house for more than a few yrs.
I was concerned when we put our house on the market in July bc of the thread on here about big houses not selling, but we had multiple offers in 36 hrs.
We really have a tale of two 'hoods here. The houses for sale that have been updated, even minimally, are getting top dollar. The houses that show poorly still are getting high prices (that’s the 4x rate vs 5+ rate I mentioned earlier).
A house exactly like mine that also backs to greenbelt but with the layout flipped sold for surprisingly low. The owners were doing it themselves, and it showed. The deck was a disaster, the flooring a patchwork of carpet and tile and nothing – I mean, nothing – had been updated. They didn’t stage it at all so you saw every little ding in the floorboards and nick in the paint. We were following closely because it was the single-best indicator of what we might get. We figured, take what they got and add $$$.
A house across the street, meanwhile, is just 150 sf larger with some interesting upgrades, and it’s going to sell for about $125k more even though some things about the second property are less desirable.
From our experience living in southern California area, housing prices have tended to be one wild roller coaster ride over the years. We sold a house we bought in 1983 for double in 1990. 4 years later the house’s value was approx. 25% less than what we paid for it. 4 years later the price recovered to 1990 price levels. We sold then it in 2006 for double the price we paid in 1990 and bought another. 4 years later current house had lost 30-40% of its value. Today considering some upgrades we made, we could list it for at least 10% over what we paid for it in 2006. But an article in today’s paper seemed to suggest that area housing prices are slipping with sellers showing more willingness to accept lower than list prices. So at least in our area it seems area housing prices might have peaked and maybe we’re headed down again…
Starter priced houses in our area are sold quickly and often over ask price. But the houses that are more expensive are not moving quickly at all and not for much over prices immediately post crash. We bought about 20 years years ago and do not expect to sell for much over what we paid. There was a time pre crash that the houses in our neighborhood were going for close to double year 2000 prices.
Yep. I remember we were so excited that a house around the corner from us sold for $299K It was so. much. money. (for this suburb)
This was before the crash. We hadn’t gutted our kitchen yet, but we figured we were in a very, very good position. Our old house was roomier, bigger yard, had some really cool & unique architectural features., we had put in new windows…all good. We were sitting on some serious equity (retirement!).
Post-crash? Our house was valued at less than we paid for it in 1999 when it was a fixer-up. $154K less than the last appraisal. And believe me, the value has barely budged since.
Welp. Looking on the bright side, our property taxes are low…
A beauty of an old tudor down the street, and I mean BEAUTY – this house was well taken care of. Amazing original 1920s tile in the bathrooms. Big gorgeous 5 bedroom 5 bath house on a large lot. Much, much nicer than our home. It went on the market last year with an asking price of $499K. You’d think it would get scooped up, even in an economically depressed area because across the tracks? it would cost millions. Nope. It eventually sold for $299K. Broke my cold withered heart to learn that.
We are stuck here and will make the best of it.
These are different questions. Has the economy and housing market stabilized from the bubble. And subsequent recession. Absolutely.
Have individual home prices returned to bubble levels. It’s market by market.
But it wasn’t realistic then and to be recovered and healthy are not conditioned on prices moving back to these levels.
So to answer the question. Yes.
To buyers who purchased during peak valuations based on unhealthy lending and gold rush mentality. Not so much.
Some markets near booming economies are at crazy levels. The real key is to continue to add manufacturing as well as 21st business growth in rust belt and undeserved areas. It’s happening one by one but it will take some time. However much will be related to post 2020 decision making.
So why this whole idea of having to own your place?
D1 and her H are paying $4K/mon for a 2 bedroom apartment in a prime location. To buy a large 2 bedroom she would have to put down $500k (plus 2 yrs liquidity) and double her monthly payment now. With the recent tax changes, it is harder to deduct mortgage/tax. She said she would buy a place if she loves it (preferably a 3 bedroom), but not for the investment purpose. She is going to wait for the next dip to buy and hope to stay in it for a while.
Because when you own, you don’t have to worry about a landlord raising the rent to an amount that it is impossible for you to pay, or about a landlord simply deciding that they don’t want to renew the lease and kicking you out.
It doesn’t happen at all regions. In NYC it is very renter friendly. The market is so efficient that rent is almost priced on daily basis (supply/demand).
I own my coop, and my maintenance could be increased or additional assessment could be placed for some capital improvement.
NYC has rent control.
@calmom, half of the apartments in NYC are not rent-regulated.
https://ny.curbed.com/2017/8/28/16214506/nyc-apartments-housing-rent-control
Why buy? It does offer one of the few tax breaks available if you don’t own your own business. If you want to start a family, it offers some stability in that you can’t have the house pulled out from under you—we rented three houses in 5 years, 2 the owners put on the market, 1, their child needed a home, so our rent was not renewed. Bad timing twice as I had just given birth; couldn’t find anything in school district. Can’t have pets at a number of rentals. Can’t customize as one pleases. More difficult to make roots in a community. No opportunity to build equity.
Having said all that, I don’t think I’m buying again simply because I don’t feel like going through the selling process. We have done well in selling our homes, having made a small nest egg with each sale owning a home truly gave us security in that it was our house with a lot of flexibility one could not have gotten with rentals.
Why buy? Personally, I was tired of the stupid stuff like no holes in the drywall and no barbecue on the deck/patio.
Kid and her roomies got a notice that they had to vacate their rental in two months- by New Years Eve - and no, the lease could not be renewed even though they were stellar renters. The owner decided to sell the place to raise money for a bigger RE project. We tried to buy the t’home from the owner - the price quoted was unrealistic to even begin to negotiate. Lo and behold, kid now lives in a two bedroom condo with 12 foot ceilings and 2 deeded parking spots. We might use the condo as our retirement pad someday. We love that area, and UW is just next door. Or we might gift it to the kid… when the time is right… we shall see.
A lot of it has to do with location. There are some areas where one might want to live that simply do no have much in the way of rentals.
My one son bought a property that he rents out through AirB&B and VBO as well as word of mouth that brings in a good income. We do well with two condo units that we also rent out out seasonally in the same area. Considering buying more.
Try as he has, son could not find anything to buy in NY area that made sense. Too much of a premium for anything that he wants.
The market has certainly recovered. The banks recovered and are no longer being closed (many are still merging). The number of banks closed since 2014 is basically zero and if any are closed, it’s more likely because of commercial or farm loans and not residential real estate.
A single home or an area may not have recovered, but yes, the country as a whole has.