A neighbor just listed their house at $339,000 a couple weeks ago so it looks my house has appreciated $44,000 in about a year and a half! That’s nearly an increase of 15%, who said the housing market was dead?
It’s okay folks, I’m not delusional. Sadly though, many Americans think in these terms, counting chickens before they’ve hatched and thinking those two birds in the bush are better than the one in the hand. And, even more unfortunately, they’ll make bad financial decisions believing that they really did just receive a windfall of $44,000 when in fact…
- A list price doesn’t equate to a purchase price. It doesn’t even mean the house will sell… ever.
- My house cost more than $295,000 – it cost that, plus interest, plus taxes, plus improvements and repairs.
- It’s not even real anyway. $44,000 in equity can certainly be pulled out through fancy financing like home equity loans… but that comes at a cost. While you might want to go through that trouble if you want to put a kid through college, you shouldn’t do that to buy yourself a new flat screen television.
This is the first time that a home has been listed in my neighborhood so it’s really the only time I could speak from experience about how people react to seeing a home listing of a very close comparable that is higher than their purchase price. Just a thought to throw out there, I’m curious what you all think. So… new plasma for my basement or should I keep working? 🙂