The REAL Real Estate Appreciation Rate

[honobob]

I see the Corpus Christi info on page 27 and the Houston-Sugar Land-Baytown info on page 33 but I see nothing regarding the Leeland/Bastrop data you mentioned. Where is it located?

Jeez, that information was from 9/08.
Here's the link, or as close as I can get to it at this late date.

City Center Bastrop, TX Neighborhood Profile

 

[REWahoo]

Jeez, that information was from 9/08.
Here's the link, or as close as I can get to it at this late date.

City Center Bastrop, TX Neighborhood Profile

Thanks. I found the following:

"Since 1990 TOTAL APPRECIATION: 173.91% AVG. ANNUAL RATE: 9.52%"

These numbers are 60% less than those you quoted in your original post and look much more reasonable. It is difficult to believe the 9/08 numbers could have been accurate. Do you think this non-government web site might have had erroneous data back then?

Never hurts to do a sanity check whenever you see insane numbers...

 

[honobob]

Thanks. I found the following:

"Since 1990 TOTAL APPRECIATION: 173.91% AVG. ANNUAL RATE: 9.52%"

These numbers are 60% less than those you quoted in your original post and look much more reasonable. It is difficult to believe the 9/08 numbers could have been accurate. Do you think this non-government web site might have had erroneous data back then?

Never hurts to do a sanity check whenever you see insane numbers...

Hey, I just cut and paste! Here ya go. PERIODTOTAL APPRECIATION AVG. ANNUAL RATE COMPARED
TO TX*COMPARED
TO AMERICA*Since 1990

433.46%

23.75%

http://www.neighborhoodscout.com/comparison.jsf

Amusing that now you think almost double digit (9.52%) annual average appreciation for over 18 years IN TEXAS is reasonable. I was ready to believe the sorry Texas story when I started this poll just because I never looked. Next poll I sure won't exclude Texas or any other area between the coasts. My belief was just that most any middle class NBHD experienced better than 4% annual appreciation, probably closer to 6-8% average if not higher. And the difference between 4% and each point higher is considerable. Say $250,000 difference on a $100,000 house at 6% vs. 4%.

 

[REWahoo]

Whatever you're drinking Bob, I want some...

 

[honobob]

Whatever you're drinking Bob, I want some...

Why don't you pick the beverage? Something that will go nice with your apology....or just sour grapes.

 

[REWahoo]

Hey, I just cut and paste! Here ya go. PERIODTOTAL APPRECIATION AVG. ANNUAL RATE COMPARED
TO TX*COMPARED
TO AMERICA*Since 1990

433.46%

23.75%

NeighborhoodScout

This link shows no information. I'm done.

 

[Nords]

Never hurts to do a sanity check whenever you see insane numbers...

He doesn't have to demonstrate sanity. He just has to seagull in, throw a few hand grenades, and express disbelief that anyone could possibly miss those screaming bargains.

It's not as if it's his money at risk.

 

[Sarah in SC]

Where are the dueling pistols when you need them?

 

[honobob]

This link shows no information. I'm done.

REWahoo it's a shame that you've been on the internets since 2002 and can't figure how to search a website. Go to FIND, tab to find best nbhd's for appreciation rates, then pick Texas for state and then statewide search for city. It's the 3rd highest area for appreciation in Texas. Pick it and then click tab for appreciation rates. Then you'll see the 23.75% in black and white. Anyone....Anyone... Good luck!

 

[honobob]

He doesn't have to demonstrate sanity. He just has to seagull in, throw a few hand grenades, and express disbelief that anyone could possibly miss those screaming bargains.

It's not as if it's his money at risk.

Ya know I always wondered who all those "guests" were when I posted.

Kinda defeats the whole "ignore" function doesn't it?

"You like me, you really like me!"

 

[Rustic23]

Historical Evidence of US Home Price Booms and Busts 1978 2003

I think this chart describes the Texas Real Estate Market, and why selecting a starting date of 1990 is misleading. Properties in the late 80's early 90's dropped as much as 40%. If you look at the chart, you will see this is true for most of the 'Oil Patch' or what we referred to as the COLT states. Co. OK. La. Tx. while other portions of the country show some very large increase. So while Tx. may show double digit numbers from 1990, it is logical that these numbers come from a lower starting point, and therefore, not as much of a 'bubble' as properties are not that over valued when compared to a market that did not go through a bust.

Anyway, I thought it was an interesting chart.

 

[tryan]

Little bit interesting ... had another REDC auction Saturday. Had my eye on 2 properties:

1. 3 Bedroom 2 bath sold at the peak 370k. Bank has attempted to sell for years ... currently on the market for 170k. Sold at auction 110k.

2. 3 bedroom 1 bath water front cottage sold near the peak 230k. Currently on the market for 125k. Sold at auction for 105k. Needs a septic system ... issues with the install (no accesss to the install site until the lake freezes over).

I dropped out of the bidding at 70k due to the work each house needed and the fact that they'll rent for ~1200/month AFTER the work is completed. No loss ... there's others. Put a cash offer on a HUD home (60k) yesterday.

So if we want to cherry pick ... 2 can play.

 

[RunningBum]

Personal experience in Cedar Park. Bought my home in May 2003 for 137000, it was vacant and I think the seller was anxious and had just dropped the price. Sold in May 2008 for 181000. 5.72% annual rate of return. I bought a pretty generic 3 BR/2Ba near schools and shopping with resale in mind. Improved the landscaping and maintained it well. Access to Austin improved with a freeway extended to within 2-3 miles of my house, and the very nearby community college expanded. Really, about everything went as well as could be, the market hadn't really even cooled off in that area yet last spring. Nowhere remotely close to 9.56%. I remember seeing the original purchase price when the house was built in 1996, but don't recall the exact number, but I seem to remember it was around 5%/yr for that period too. It would've had to have been around 60K to get the claimed return.

 

[honobob]

Personal experience in Cedar Park. Bought my home in May 2003 for 137000, it was vacant and I think the seller was anxious and had just dropped the price. Sold in May 2008 for 181000. 5.72% annual rate of return. Nowhere remotely close to 9.56%.

I'm assuming the 5.72% is your compounded annual appreciation. That's typically what I use to make comparisons but it understates appreciation against your purchase price. The 9.56% by NBHDscout is average annual. Your rate would be 6.4% (181-137=$44K/5years=$8,800/137,000 purchase is 6.4% average annual appreciation). Now if you leveraged that purchase and computed your return on equity you'd be more in the 40% range. Boosts your rate but dosen't make you any richer. I still like the compounded rate for comparisons.

 

[Martha]

Hono, when you think about this stuff I suggest reading up on the concept of regression.

 

[Texas Proud]

I don't know about the 'average' home price increase or decrease... but I can talk about a real one...

I bought my old house in 1986 at what I thought was the bottom of the market, but it actually went down another 10%...

The house I bought was purchased at twice the price I paid for it a couple of years earlier... so a 50% drop..

Since I am about to sell, I calculate that my appreciation is a compound 3.1%... not horrible, but not close to the 10% or 28% that is given...

AND, that means that if the people who sold it to me were still there, they would just be breaking even.... so no appreciation to them...

The house I just bought is probably 11% less than the 'going rate'... and this is down from the high a few years ago... down by about 23%... but I got a deal.. even the realtor said that she was surprised they accepted my offer... but, it was the only one they got in 210 days...

 

[honobob]

Hono, when you think about this stuff I suggest reading up on the concept of regression.

With all due respect Martha, isn't regression exactly what I'm reporting? For almost 20 years in the area reported by NBHDscout.com for the type of property they've compiled the facts for isn't 23.75% the average annual or "mean" appreciation? More than likely some years were more and some years were less but the regression to the mean over that period resulted in 23.75% yearly appreciation.

Does your analysis come to a different conclusion? If so would you share?

 

[Animorph]

I'm seeing 2% annualized appreciation in my house over the last 18 years, from initial cost through a refi appraisal in April. Arizona, so some boom and bust. Would have been 5.1% over 16 years at the peak. Didn't buy it as an investment.

 

[Texas Proud]

With all due respect Martha, isn't regression exactly what I'm reporting? For almost 20 years in the area reported by NBHDscout.com for the type of property they've compiled the facts for isn't 23.75% the average annual or "mean" appreciation? More than likely some years were more and some years were less but the regression to the mean over that period resulted in 23.75% yearly appreciation.

Does your analysis come to a different conclusion? If so would you share?

No such website... "We did not find any results for NBHDscout.com."

 

[honobob]

I'm seeing 2% annualized appreciation in my house over the last 18 years, from initial cost through a refi appraisal in April. Arizona, so some boom and bust. Would have been 5.1% over 16 years at the peak. Didn't buy it as an investment.

TP, omg ur2fune! NBHD is short for "neighborhood" , see posts 128,115,99,95,81. LOL Where r u from?

 

[Texas Proud]

TP, omg ur2fune! NBHD is short for "neighborhood" , see posts 128,115,99,95,81. LOL Where r u from?

OK... says that my area is 5.33%.... but that is some of the 'nicer' neighborhoods around... mine is closer to the 3% I mentioned below.. but that is as of the drop over the last few months or so...

And it says that it is up 4% from last year... but that is wrong.. house prices are going down... I was in the market for a house for over a year and finally grabbed one.... I bought it 18% less than the original offer price...

 

[honobob]

the original offer price...

What is this? Is this the sellers "asking price"?

 

[Texas Proud]

What is this? Is this the sellers "asking price"?

yes....

 

[tryan]

more cherry picking ... my 60k offer to HUD was countered at 86k. This is a house that foreclosed at 235K. 2 deals have fallen thru on this one (no financing available). So HUD needs a cash buyer.

Needs ~30k worth of work so I am still on the sidelines. Would rent for 1200/mo so I need to be into it for under 100k.

Speaking to my realtor ... says most deals are falling thru because PMI won't take the risk. Need 20% down. Makes sense (imagine the payouts they've made over the last 5 years).

 

[Moemg]

Sorry to get off topic but I need to ask HobNob a question and since his mail is private I thought I'd try this venue . Did you send me emails yesterday ? Please answer my curiosity is killing me .
Sorry , Now you can return to the normal programming .

Moe