Home Ownership History

[latexman]

I remember this by heart. Transferred to NJ in 1983. First days at the new job, one of the native-NJ-eons took me aside and said house prices are increasing at least 1% per month, and the best thing we could do is buy the biggest house we could afford. We tried. Bought at $120k. 5 years later transferred to NC. Sold the NJ house for $250k. If we had sold a year earlier, we think we would have got $280k.

250 = 120 (1+i)^5 ----> (1+i) = 1.158 ----> i = 16%

Wow!

 

[Teacher Terry]

Due to moving for jobs I have lived in 5 states and owned 11 houses or condos. The ones in the Midwest and upstate New York we broke even. The 7 in Reno both lost money and made money. Ended up ahead by 100k. Plus mortgages were always much lower than rent. The condo I own now is worth 40k more in the 2 years I have owned it. This is my last house and it doesn’t matter what it’s worth.

 

[harley]

We've bought and sold 5 houses, not counting the three we currently own, or the two rentals. We averaged 10%/year on the ones we sold. All in the Northern VA area, a good market for increases, except for one near Ocean City MD. Pretty good investments, even though they weren't bought as such.

Our rentals are currently valued at about 100% more than we paid 10 years ago. Plus the significant rents we receive on a monthly basis. Definitely good investments.

Of the three we currently own, two are valued at nearly 20%/year increase. The last one, our big $1.3M house at the shore, is almost back up to what it cost us to build back in 2008. I haven't done the math, but I'm sure that one has knocked our overall profit margin down pretty significantly.

 

[EastWest Gal]

We’ve only had two houses. The first one was bought in 1991 when I was pregnant, for $289K. We sold it in 1998 for $360K. We used the proceeds for a large down payment on our current house for $242K. Much more house, lower COLA. Refied in 2003 for landscaping work and a pool in 2003. Paid off in 2014. Would sell for over $400K today.

Oh, that first townhouse? Had we kept it and rented it out would sell today for a cool $1.4M, since it is in an excellent location in Sunnyvale, heart of Silicon Valley. 20/20 hindsight is not useful.

 

[FLSUnFIRE]

Sale Prices/Market Value (all FL):

2002-2012 3/2/1 1300ft^2 Cumulative Gain before transaction costs: 10.7% (up 50% prior to collapse in '08)

2013-2018 4/4/4 3400ft^2 Cumulative Gain before transaction costs: 4%

2019-Present 2/2/2 1300ft ^2 Total Unrealized Gain before transaction costs: 25-37%


Netting out transaction costs and sale prep, lost close to 10% on the middle house. It was not a bad investment had we stayed together but too much for me after the divorce as I was house poor on a single income. If we had stayed together and finished the kitchen remodel, it we would be about 50% increase (net of improvements) from 2013-2023.

 

[Badger]

I have only owned 2 houses with the first house sale used toward the second plus a bit of cash. The total cost of the second home from 1983 compared to a Zillow estimate today is a 1794% increase if the "Percent Increase Calculator" is correct.
The second home is not a dream house by most people's definitions and when eventually sold it will be torn down and a McMansion built in its place like the rest of the homes in the neighborhood. It is the location that made the difference.
I was told location was important back in 1972 when I was about 24. The house was also a mess that needed a lot of work. If I am lucky they will carry me out on my last day. Then my wife can sell it and go live in a condo or assisted living. Otherwise my step-children can either sell or have a nice vacation home in Florida at the beach.

Cheers!

Cheers!

 

[pb4uski]

We've had some home runs and some so-so's.

First house: "expandable" gambrel in one of Boston's northern suburbs/NH line bought in early 1984 for about $75k IIRC. "Expandable" meant that the upper floor was unfinished. Basement included one-car garage and basement/utility room; main floor was kitchen, dining room, living room, bedroom and bathroom; upper floor was a studded wall across the middle of the unfinished top floor. We built out 3 bedrooms, a master bathroom and roughed in a common bathroom during the 2 years that we lived there... I'm guessing $10k in materials and labor and a lot of sweat equity. Luckily, DW is very good with mudding drywall and covered up all my mistakes. Sold in late 1986 for abut $150k IIRC. Home run.

Second house: 4 bedroom split ranch was corporate owned and used by visiting company personnel. Good bones but 70s era finishes... green/yellow/orange shag rug, avocado green kitchen appliances, bathrooms in avocado green, blue and harvest gold. Bought in late 1986 and sold in 2011. Totally redone over the 25 years that we lived there. Negligible gain on sale but we enjoyed the house for many years and that is where our kids grew up. Sold for about what we had into it. So-so, but after the sale of this home our annual expenses declined dramatically and since it was mortgage free we had the proceeds from the sale in the bank and that made me comfortable with retiring.

Lakefront lot: We bought with the intention of building our dream home there. Decided that the waterfront was too shallow and too mucky and that we really wanted to be on my parents lake. Sold after we bought our lakefront home for almost twice what we paid for it. We got lucky that undeveloped lakefront appreciated dramatically over the few years that we owned it. Another home run.

Lakefront home: A seasonal "camp" 5 doors/3 minute walk from the "camp" that my father built and that I grew up in and DM summers at. After 1 year we confirmed our suspicions that it would need a new septic system so we put in an artesian well and new septic and a foundation (original camp was on cedar posts). A few years later we demolished and rebuilt and then later rebuilt the garage. Now that we are snowbirds it is our summer home. Probably worth only little more than what we have into it but we've enjoyed living on the lake for 18 years. Will probably be a so-so financially. It is an extravagance considering the carrying costs and amount of time that we spend there but I suspect that is true of any ~$500k property that is only used for 1/2 a year.

Florida condo: Our winter home, ~1,450sf 2b/2b and den/flex room. Paid ~$175k in June 2016, put $25k into a remodeled kitchen and probably now worth about $295k. Another so-so financially but we've enjoyed it, Florida winter weather and no state income taxes.

 

[phil1ben]

First House newly built condo/townhouse 1800 sq. ft. (bought 1987 - sold 1989) - lost 9%
Second House 1760 colonial 2800 sq. ft. (bought 1989 - sold 1996) - lost 10%
Third House contemporary 5300 sq. ft. (bought in 1996 - sold 2006) - gain 110%
Fourth House custom build 11,500 sq.ft. (built in 2007 - still reside) - gain so far 35%.
Beach House 3800 sq. ft. (built in 2001 - still reside) - gain so far 250%.

Started off poorly but recovered.

 

[jollystomper]

1st home: This one leveraged the purchase of our future homes. A condo, bought for around $53K in 1983 (mortgage interest I recall being over 12%) sold in 1986 for $91K.

2nd home: $122K, purchsed in 1986, using most of the profit from the condo sale for a down payment. The mortgage interest was 10.5%. I had a corporate move in 1990, in the early stages of a housing recession started. We had a choice of Megacorp buying the house for $128K or trying to sell it on our own (when list prices were around $135K but not selling). We took the Megacorp offer. The house did not sell for a year, and the selling price was $118K.

3rd (and current) home: The other end of the corporate move in 1990. It is our "dream" house, as after we saw it we thought "only in our dreams can we afford this house" . Megacorp gave us a week to purchase a home, but in retrospect that would have been a disaster. We choose to move into an apartment with young kids and take our time. After looking at many houses, this one matched our dream, but our was budget $180K and the house was listed for $239K (which had already been reduced from $269Kby $30K). However, it had been on the market for over 4 months, and the owners were going through a divorce and had to sell. Our realtor said no way we would get it.

Meanwhile, there was another house in the area, with a similar layout but half the land and 2/3 the size, whose price had been reduced to below $170K . We had 2 contracts drawn up, one for each house. We decided to stretch a bit, and offered $190K for the dream house, and told our realtor if the dream house offer was not accepted, just thank them and put the contract on the smaller house. Our realtor called us just before midnight to tell use that the "dream" house owners decided to accept our offer. After inspection some things were found (nothing major, like missing doors) that we accepted credits for to knock the final sales price down to under $189K.

We have refinanced 4 times to drive the interest rate down from 10% to 2.875% over the years, before paying off the balance in 2020.

 

[COcheesehead]

I am 60 and have owned 9 homes. The first ones were the result of getting transferred a few times early in my business career. The rest were moving to a better place. The current one is our retirement home. We call it the house of lessons. It has all the things we missed or learned from all of our previous homes. Even this one still has some things we’d tweak.

Just with a back of napkin calculation, all the equity in the current house is less than what we’ve made over the years on the previous ones.

I never considered the house an investment, but it’s always been part of our life plan. The value will be used by us or someone at some point.

We have a mortgage on the current house at under 3% which has turned out to be a nice situation to be in.

 

[Midpack]

Did you pay cash for the houses or was there a mortgage? What would be the rate of return if you compare the net increase in purchase price to your down payment plus the equity part of your monthly mortgage payment?

Mortgage on the first three, cash the last. I’d recalculate but I don’t remember what the rates were. At least we made money on every one.

Our first mortgage in 1981 was a 9.25% adjustable rate mortgage, considered a good deal at the time. Fortunately for us the rate went down after 5 years, just dumb luck.

I never claimed our homes were an investment. But I do consider them a hedge against inflation, I can't imagine anyone doesn't care at all...

 

[Gumby]

Times have certainly changed in the housing market. Our first mortgage to buy our house in 1992 was 8.375% for a 30 year fixed, and no one blinked an eye at those rates back then. During the aughts, when interest rates fell like a rock, we refinanced five times. Each time we reduced the term and lowered the interest rate, until we were down to a 5 year 1.9% loan from PFCU (which I learned about here). We never took any cash out during refinancing, made extra principal payments all along the way and made our final payment at the end of 2016.

 

[dixonge]

I've owned exactly two houses in my life. First one was 1997. Landlord gave us 30-days notice and we ended up buying the house from a friend for around $65k I think, sold after we moved out. We added some tile floors and I built a large shed out back, by hand. Made money on the sale, but not a huge amount. No idea what percent it was.

Second one we had built, brand new, around $160k. Got in on a 'no-money-down' 2-year ARM w/ a piggyback loan to avoid PMI. Loans were sold within 90 days to some new entity. Massive interest rate jump in year 2, so we refinanced and got everything down to one payment.

It was 2007.

Loan sold again, ended up making payments to Taylor, Bean and Whitaker. You may remember their CEO who ended up being convicted of fraud:

https://www.ocalagazette.com/lee-fa...-on-the-great-recession-released-from-prison/

Some time in 2009 we began thinking about early retirement. By then our loan had been taken over by Countrywide/Bank of America. When we got around to trying to sell, our broker informed us of two major issues:

1. The house was *way* under-water. We would need to bring $50k to the table to get out of the mortgage, OR...
2. We would need to get BoA to agree to a short sale.

But the main issue was timeframes. At that time sale approvals through BoA were taking six months or more, and the broker said if any buyer's broker asked about the lender and found out it was BoA they would just hang up.

So we ended up walking away. The house was eventually sold 'on the courthouse steps' as they say, but not for almost two years. It was a really crazy time.

Yet now, here we are, 15 years later, have been enjoying retirement, traveling and renting all this time, and our credit scores have never been better. It is highly doubtful we'll ever own real estate again, but if we do we'll pay cash.

My apologies, that was a lot longer than I intended...

 

[ER604me]

Our first home was purchased for 61k in 1985. We still own it and converted to a rental in 1998. Current value is probably around 310k (north of 3% gain per year but between early mortgage and addition I built it probably just kept with inflation).

Our current home was purchased in 1998 for 196k and is currently worth 600k+ (just under 5% appreciation per year, no mortgage but we added a good size addition).

We have bought 4 SFH rental properties between 2009 and 2016. All have stayed rented for at least 11 1/2 months/yr. All have appreciated about 8.5% per year. No mortgages so they have worked out quite well and are a good source of income as we make Roth conversions and until we claim SS.

DW found our current home and pushed for us to do the rentals. She likes real estate and I just help make it work.

 

[Out of Steam]

We have a mortgage on the current house at under 3% which has turned out to be a nice situation to be in.

We're in a similar situation, though it's small enough not to have much impact on our lives. If the interest rate wasn't well below the inflation rate, we'd probably accelerate payments to pay it off before reaching the age where we have to take RMDs.

 

[rk911]

I've never considered our home as an investment. An asset, yes and it's current value is included in our net worth. We've owned two homes since we married in 1970. we broke even on the first one (a rapidly deteriorating neighborhood). we bought our second home in 1988 and paid off the mortgage approx 20-yrs ago. In the past 35+ years the value has increased roughly 5.6% per year.

 

[thod]

We bought our only home in 1992 a year out of college. (31 years)
Paid: $123,000
Current worth (according to Texas): $390,000 (3.79%)
(according to Zillow): $437,000 (4.17%)

 

[steelyman]

Mildly related: I saw an interview with a Zillow person who said that 6.9% is a discount to apply to posted Zestimate prices for off-market listings to arrive at a realistic value.

I didn’t bookmark the article but I think it said that number was determined from actual data. Obviously just a ballpark.

 

[MRG]

Our first 4 were all losers, some more than others. Our current house has over doubled in value over 6.5 years. If I'd only known that when we bought.

 

[pacergal]

First home, 1984, $58,000, sold 1989 for $85,000
Second, current, and hopefully forever home bought 1990, $90,00. Zillow has current value $636,800.
1960 ranch house, single story. Dad bought it new, and sold it to us after sitting on the market for a long time when he was transferred for his job. My brother rented until he got married, then we bought it.
Prices in this area have skyrocketed over the years! It was a good choice.

 

[Midpack]

Tangentially related. My Dad bought his last home in 1963 for $23K. Sold 2019 for $475K. Zillow says it’s worth $544K today.

 

[Dash man]

Bought first home in Albuquerque in 1987 for $98k, sold it in 1991 for $110k, a wash after selling costs and landscaping.
Second home in Dover, DE in 1993 for $138k. Sold in 2005 for $184k after renting it for 8 years.
Third home for $156k in PA, now worth about $430k. Rented beginning in 2001 until son and family moved in 2018.
Our current primary home in 2001 for $308k, now estimated at ~$680k.
Our Florida oceanfront condo in 2016 for $405k, now estimated $580k.
In 2017 we bought a recently remodeled 1940 Jersey Shore Craftsman home for $555k, now estimated ~$950k.
We bought a home for our younger son’s family in 2020 for $312,500, now worth ~ $425k.

 

[MC Rider]

Bought our first house in 2010 in Los Angeles. Sold it last fall for over 2x and moved to a much lower cost area, buying for less than 1/4 of that sale price. Pretty darn happy with that.

 

[old medic]

We will play...
1st home we owned was a singlewide trailer, Placed on the property of the house we were renting ($50/Month) with the hopes of buying it, the Land Lady kept going back and forth about retiring back to her family home. More on this later.... We paid $11K for it, 4 years later sold it for $7K... Figure $84 a month to get out of a 1.5-bedroom uninsulated shack of a house with 2 kids was well worth it.
2nd home... We acquired 7.5 acres of property for next to nothing and was planning on building a house. I had been collecting lumber and materials, had the design, but every attempt to borrow money for construction hit a wall. Almost moved the SW Trailer to the property 1.5 miles away, but stumbled onto a double wide modular that had been ordered but the husband died just prior to delivery. After getting up to walk away from that several times, We bought it, delivered and set up with us doing all the finishing work for $54K with another $10K for well septic decks ECT. The materials I had been saving became a 2 story 24X28 shop. We sold it for nearly 300% more 25 years later.
Homes 3 and 4... The former Land Lady had finally decided she wasn't moving back. She had continued to rent the house to my brother since we moved out. She let us have it for $38K but my brother stays as long as he wants....
Her Brother had built a house on the family property in the early 70s, and it had been cut off and sold... We managed to buy it at auction for $6500... yes $6500
So we now own 2 houses on 4 acers free and clear. My Brother is the built in caretaker.
The 4th house is getting a total restoration, probably got twice what we paid already in it, but it should be around $200K when done.

 

[ElizabethT]

All California-

First condo and first home (both early 1980's) both in Ventura County, generated no profits at point of sale. The condo because we only owned it for one year, with the appreciation barely covering the selling costs, and the home because a family room had to be torn down due to lack of permits (we were young- the questions we didn't know to ask when we purchased was long.)

Mid 1980's- Bay Area next, due to job transfer. We bought an attached home for $100,000, and sold it two years later for $200,000. We had multiple offers after one week on the market. Even then, the Bay Area real estate market was crazy.

Mid 1980's to early 1990's- Bought our next home back in Ventura County for $150,000, and sold for $225,000.

Early 1990's to late-2010's- Bought our next home in Orange County for $275,000, and sold it for $785,000. We again had multiple offers after one week on the market.

Late 2010's to now- Bought for $1,200,000 in Coastal Orange County, and recently sold it for $2,000,000. It was a literal feeding frenzy once our listing went live. We had multiple full price or over-asking offers within 48 hours of listing.

In escrow currently on a smaller but more expensive home within easy walking distance to ocean.