Here is an actual example of a home that’s for sale in the MLS today; historical data from the County Assessor’s web site show the history of our recent market:
| Date | Action | Price |
| 12/1999 | Purchased from builder | $204,000 |
| 4/2005 | Sold | $390,000 |
| 11/2005 | Sold | $519,000 |
| 1/2008 | Listed in MLS | $320,000 |
I see a lot of interesting points in these 4 simple rows.
1. The appreciation from 12/1999 to 1/2008 represents a 4.5% annual appreciation rate. That is just about equal to the long-term rates for Phoenix. It’s as if the craziness of 2005 never happened!
2. This assumes the home will actually sell for $320,000. That might be a tall order in today’s market. If it actually sells for 93% of that figure ($297,600), then your appreciation rate drops to 3.8%.
3. The home appreciated $129,000 in 7 MONTHS in 2005. That’s 33%! Yep, sounds about right.
4. I was shocked that somebody paid $519,000 for this home in 11/2005, since by then the party was pretty much over, and homes were beginning to stay on the market while sellers got nervous. I wanted to see who the realtor was that advised their clients on this one, but a little further research shows it did not get sold through the MLS. Hmmmm… Did somebody buy a FSBO without any representation…??
Your shaking his head Realtor,
Chris Butterworth
Technorati Tags: market analysis, appreciation rate, FSBO, Fletcher Heights
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January 18, 2008 at 11:45 am
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January 8, 2008 at 2:58 pm
Shailesh Ghimire
Chris,
This is a great post. After reading this I did some math for my own place. I bought in the summer of 2004 (thank goodness). Between 1994 and 2004 the house appreciated about 8% per year (great rate). After I bough it went up 38% or so and hit the peak in early 2006. Then it started falling. Now I back down to more reasonable levels, and I still have $50K + equity in my house. That is great. So, for folks like me the 2005 boom doesn’t matter at all. However, for those who bought at the peak or borrowed execessivly at the peak - its a different story.