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Neighbors Selling Their Homes

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Remember last year when I tongue in cheek wrote that my house appreciated to $339,000 because someone in my area listed their home for that much? One of my neighbors recently refinanced his home to purchase a home down in Puerto Rico and while his was appraised at around $339k, other neighbors have started actually selling their homes and gotten far less. One neighbor two houses down just put their home on the market for $292,000 and another sold and closed at $308,000 (they are right next to each other); by comparison I bought my home two years ago for $295,000.

Does this mean I bought at the peak of the bubble and will see my house’s value languish? Hardly, because the business of homes isn’t as cut and dry as straight numbers. Just as I can’t say my house is identical to the one asking for $339,000, I can’t really compare my home to the one that sold for $308,000 or the one listed for $292,000 – there are just too many differences to be able to say they’re the same.

In both cases, there are only three bedrooms, two full baths and one half bath in those homes; mine has four full bedrooms, three full baths, and a half bath. Mr. $339, he’s just crazy over there because he only has an extra half bath over my neighbors… or is he? $339 has brand new windows, $308 has relatively new windows too but $292 still has the old 20-year old windows I recently replaced for $7k almost a year ago. $292 has a fireplace and a beat up old deck, $308 has neither… so you would think their prices would be closer given some of the other characteristics, but they’re not. With the $308 home, the couple was retiring and looking to move down south, money wasn’t as much of a concern as time was and so they listed it low and sold on Day 1. $339, probably not in a rush, that house has sat empty for months.

Am I simply justifying the price I paid for my house? Maybe in part, but mostly I’m just enjoying the psychology of the housing market as it plays out both locally and nationally in online and print media. I think a lot of buyers are picking their spots a little more carefully now because they know they have time on their side but buying a home is a long term decision. The last housing “boom” was like eight years long so even if down cycle lasts eight years, you’re still only talking ten years of living in one home. Ten years is nothing… that’s only a third of the way through a thirty year mortgage.

{ 5 comments, please add your thoughts now! }

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5 Responses to “Neighbors Selling Their Homes”

  1. Chris says:

    His house may have been appraised for $339k, but thats probably not be what he can actually get. When you say he refinanced, I assume you mean he pull cash out of his equity. The bank gave him a loan, they didn’t buy his house.

  2. Posco says:

    Exactly, I was just going to say the same thing as Chris. The bank knows it’s going to be “earning” interest on whatever that owner pulls out of the house equity.

  3. cami says:

    One thing to consider is property taxes. I don’t know that much about how they assess values, but if you bought the 292K house and put in 7k windows yourself, wouldn’t you only be paying properties taxes on the 292k (for a least the first few years anyway). Plus 292 + 7 = 299K so it’s still cheaper than all the other houses you mentioned, except yours.

  4. Patrick says:

    You most likely won’t get the full $7k that you spent upgrading windows, but you should get some return on them when you sell. Your house is likely much more energy efficient too, so you should have lower utility costs in the mean time.

  5. plonkee says:

    Yes I think you are justifying the price that you paid for your house. You wouldn’t be normal otherwise.

    Eventually, your house is likely to go up in value, even if you did buy at the worst possible time. And there’s still the possibility that you will eventually sell at one of the best possible times.

    If it helps any, over here, an extra bedroom would probably add £15K onto a house price (approx $29K). So looks like you could be quids in.


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