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House Price Anomalies
Old 02-07-2017, 11:48 AM   #1
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House Price Anomalies

Didja ever look back at homes that you lived in, and checked them for current prices?....
DW and I were reminiscing... remembering some of the places where we lived together. (A total of 22 moves) Here is a comparison of then/now prices in the homes where we lived for the longest period of time.
Very strange results.

Pawtucket RI... 750 sf house. rented for $36/mo. in 1958... sale price was $7500. Inflation price s/b $62,000... Current price $240,000.

Martha's Vineyard Ma... Rented for $90/mo. in 1959 could have bought for $30,000...Inflation price s/b $240,000... Current sale price est... $1,500,000. Now a B&B that rents for $8400/mo. in July and August. (see "1720 House").

Falmouth Ma.... Bought for $11,000 in 1962 , inflation price s/b $88,000. Current price $419,000.

Clifton Park NY... Bought in 1968 for $136,000... Inflation s/b $449,000, but the actual current Zillow price is $197,000... go figure

And one more -not-a-house- but condo's in the Chicago office building where my office was "The Montgomery" , (Montgomery Ward went bankrupt in 2001)... A condo the size of my old office now sells for $1,300,000, and rents for $3900/mo. The largest condo is valued at $4,000,000.

Have you looked back? Might be interesting.
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Old 02-07-2017, 12:13 PM   #2
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I have and it is interesting. What I found was that NONE of the homes that I grew up in or that my parents owned later appreciated even as fast as inflation. This just reinforces, of course, how undesirable the area that I grew up in has become.

The homes that I owned/lived in are more of a mixed bag, a couple better than inflation, a couple worse - but I wouldn't have gotten rich by staying in any of them. Especially the one in New Orleans that was washed away in Katrina.
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Old 02-07-2017, 12:15 PM   #3
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I bought a 870 sq-ft townhouse in Huntington Beach, CA in 1981 for $82,000.

Zillow estimate now is $370,000.

Kick myself in tookas once more time for good measure. I really should stop doing that, I'm too old to still be beating myself up -
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Old 02-07-2017, 12:30 PM   #4
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The house the ex and I bought for $78k in 1979 shows in Zillow.com as valued at $359k, inflation calculator says $257,858. The house sold for $90k in 1984.

Eighteen months later I bought a house by myself for $94k, inflation calculator says $217,138, zillow.com says the house value is $370,293.
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Old 02-07-2017, 12:45 PM   #5
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As I expected, the areas that we've lived in haven't done well vs inflation.
  1. OH 1979, our first house. With inflation, purchase price should be up 226% today, recently sold for +169%.
  2. FL 1990. With inflation should be up 84% today, recently valued at +93%.
  3. IN 1993, current house. With inflation should be +66% today, recently valued at +54%.
Of course online valuations are highly suspect, but only 1 of our 3 houses kept up with inflation. The other two in flyover country have not, no surprise.

Amusing exercise, good thing we've always deliberately been extremely "house rich."
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Old 02-07-2017, 12:53 PM   #6
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JJQuantz, what about in NoVA? Prices there definitely outpace inflation. We owned 3 different houses in Arlington. Bought the first at $90K, sold 10 years later for $225K. Inflation would have had it at $128K. Bought the next one at $240K, sold 10 years later for $635K. Inflation would have had it at $306K. The current Zillow estimate is $865K, which sounds reasonable for 12 years later. The third one was an inheritance deal, so it doesn't apply. But we sold it 3 years later for a tidy profit over the appraised price in the estate. Unless you're out in the boonies of Manassas or Ashburn or something, I'd be surprised if a DC area house isn't beating inflation.
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Old 02-07-2017, 12:55 PM   #7
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Previous homes in upstate NY, WI and KS not worth much.
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Old 02-07-2017, 01:01 PM   #8
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My first rental - a studio in Old Town San Diego... last rented for $2500/mo. I rented it for $125/month in 1979.

2nd rental - a 2 br cottage (in a court of cottages). Rented for $250 in 1981... now torn down and condos built in place. Similar condo to the one put in place sold 5 years ago for $161k.

3rd rental - torn down and supermarket built on top.

4th rental - 2 bedroom 1 bath. Rented for $375 in 1983. Sold for $600k last year.

5th rental (I stayed here for 5 years until I moved from San Diego). 2br, 1ba in a cool victorian-ish designed by Irving Gill... Now rents for $2800.

First home purchase - Bellingham WA. Bought for 75k, sold for 82K in 1993. Zillow says it's worth $293k now.

2nd home purchase in suburban Philadelphia. Bought for $114k, sold for $136k in 2000. Now worth $228k.

But the best delta in price is the house I live in now. Dad bought it for $29k in 1966. I bought it from him in 2003 for $600k. It's gone up since then... This is a 55 year old tract home... but on expensive dirt in a good neighborhood.
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Old 02-07-2017, 01:12 PM   #9
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In some cases it can really be astounding.
The house my parents bought in 1948 for $10K is a little (1,200 sf) frame house on a very small lot in a very blue collar neighborhood. Last sold for $350K in 2008, and Zillow says it's now worth over $420K. Brooklyn, NY.
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Old 02-07-2017, 03:49 PM   #10
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Reading about these incredible appreciations in prices makes me glad I live in the South.

We've always had a housing market based on the amount they cost to build. Through the up's and down's (even 2008), our house prices have been going up some--but not too much.

I cringe when watching HGTV house flipping shows when $650K in Orange Co., CA or Toronto buys you a place we could buy for $50K--or less. And I wouldn't begin to live in such a dump of a house.

It's been nice to have lived in 4,400 square foot, 4,200 square foot, 3350 square foot and now 5,200 square foot homes with the largest payment @ $850 per month--even when mortgage rates were 8.5%.

You know what we call Tiny Homes in the South? Recreational Vehicles.

I'm just glad to have lived my working years in a stable real estate market.
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Old 02-07-2017, 03:59 PM   #11
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Houses like one where I lived as a kid now sell for about 100x what my parents paid. Unfortunately they avoided the capital gains tax by selling early.
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Old 02-07-2017, 04:03 PM   #12
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Quote:
Originally Posted by harley View Post
JJQuantz, what about in NoVA? Prices there definitely outpace inflation. We owned 3 different houses in Arlington. Bought the first at $90K, sold 10 years later for $225K. Inflation would have had it at $128K. Bought the next one at $240K, sold 10 years later for $635K. Inflation would have had it at $306K. The current Zillow estimate is $865K, which sounds reasonable for 12 years later. The third one was an inheritance deal, so it doesn't apply. But we sold it 3 years later for a tidy profit over the appraised price in the estate. Unless you're out in the boonies of Manassas or Ashburn or something, I'd be surprised if a DC area house isn't beating inflation.
We haven't been in the DC area for very long (in real estate terms). We bought our current home in late 2012 at a price that was significantly depressed compared to the peak of the boom. We could probably sell it today at a bit of a profit, definitely beating inflation. It looks like prices in this neighborhood have been up about 5% per year over the last 5 years or so.

As someone else said, flyover country is not the place to make money on real estate. The houses that my parents bought in 1997 and 2001 both recently sold for what my parents paid for them. We are talking two bedroom SFHs that each went for ca. $60K . As I said earlier, I did not grow up in the most desirable of areas.
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Old 02-07-2017, 04:23 PM   #13
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I bought my first house for $127k in 2004. In 2009 I sold it for $132k, losing money on the house overall (after taking into account costs to fix it up, closing costs etc).

~ same size house next door sold for $136k 8 months ago.
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Old 02-07-2017, 04:30 PM   #14
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The little bungalow I bought for $45,000. as my first house in Madison WI (1987) sold last year for $340,000. On the other hand, the second little bungalow I bought here in MN has depreciated--never really came back after the recession. Fortunately I sold it at its price peak in 2008.
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Old 02-07-2017, 05:12 PM   #15
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I am only in my second house.... so not much to compare...

But, parents bought the house I grew up in back in 59... paid $10,500 (from what I was told, could have been more)... now worth (per Zillow) $119K... so not that great... also, it is not that great of a house... however, it was completely redone 6 or so years ago....

Interesting to see that it was repoed and was listed at $42K in 2013!!! So probably not worth the $119K....


OH... and location is a huge thing... if parents had spent a couple thousand more back when... could have been in Bellaire... where a similar home is worth over $500K...
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House Price Anomalies
Old 02-08-2017, 01:27 PM   #16
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House Price Anomalies

One house, bought in 2000, has matched, or slightly beaten, inflation, depending on the current valuation you believe...
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Old 02-08-2017, 01:45 PM   #17
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The house I still live in is worth about 2.8x what I paid for it 30 years ago, beating the cumulative inflation factor of 2.2x.

I guess if I were in a hot market that has gone up more, I would feel better. But would it change anything though? If a house appreciates much more, that means it is in a hot market, and a congested area. If I do not sell, what do I get out of it other than a good feeling?

I prefer to get a good feeling out of my stock rising. That stock gain, I may, no, make that do, spend some of.


PS. If the house valuation fails to match inflation, then it means it is in a decaying area. That would make me unhappy, but then I would know the situation via other factors and would not need Zillow to tell me.
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Old 02-08-2017, 01:50 PM   #18
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Originally Posted by Texas Proud View Post
I am only in my second house.... so not much to compare...

But, parents bought the house I grew up in back in 59... paid $10,500 (from what I was told, could have been more)... now worth (per Zillow) $119K... so not that great... also, it is not that great of a house... however, it was completely redone 6 or so years ago....

Interesting to see that it was repoed and was listed at $42K in 2013!!! So probably not worth the $119K....


OH... and location is a huge thing... if parents had spent a couple thousand more back when... could have been in Bellaire... where a similar home is worth over $500K...

Forgot to mention.... my mom sold the house for $27K before it was redone... so, in 50 years it went from say $12K to $27K.... and we had converted the attached garage to two bedrooms (later to a game room) and built a really good 2 car garage in the back yard....
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Old 02-08-2017, 02:43 PM   #19
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I didn't really notice any appreciation anomalies. Houses in San Diego and Hawaii appreciated more than houses in small town Texas and New Orleans. Well, duh!

The anomalies that I had more fun with, were related to appearance of the exteriors of these homes.

You know, the kind of thing that makes you shake your head and wonder "Good heavens, what were they THINKING?"
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Old 02-08-2017, 04:38 PM   #20
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Originally Posted by Midpack View Post
As I expected, the areas that we've lived in haven't done well vs inflation.
  1. OH 1979, our first house. With inflation, purchase price should be up 226% today, recently sold for +169%.
  2. FL 1990. With inflation should be up 84% today, recently valued at +93%.
  3. IN 1993, current house. With inflation should be +66% today, recently valued at +54%.
Of course online valuations are highly suspect, but only 1 of our 3 houses kept up with inflation. The other two in flyover country have not, no surprise.

Amusing exercise, good thing we've always deliberately been extremely "house rich."
We have owned a number of homes in the Midwest. The big bump in price there was in the late 60's-70's as boomers looked for housing-some homes doubled in price then. Since, a good rule of thumb until the crash of 07' was 2-3% a year inflationary increase in price. Homes we owned in the late 80's are now about 50% higher.
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