Home Ownership History

[Midpack]

Was just reviewing, and thought I'd share the summary of our home ownership. We've owned 4 homes in our lifetimes, from an investment standpoint they weren't great returns...

• Bought our first home OH in 1981 for $58K , lived there for 8.5 years, it has appreciated from 1981 to 2023 3.1% per year.
• Second home bought FL in 1990, lived there 3 years, it has appreciated 3.6% per year.
• Third home bought IN 1993, lived there 26.5 years, it has appreciated 2.8% per year.
• Current home bought NC 2019, lived here 3.5 years so far, appreciation 11.4% per year so far. Good times so far...

I am sure some of you have had far greater appreciation, but my career took me to flyover country mostly...

 

[aaronc879]

I haven't owned much and the appreciation hasn't been much. I bought a condo in 2008 for $35K and sold it in 2016 for $30K. I bought a house in 2016 for $110K and it is now worth $165K(supposedly). It's realistically worth as much as $150K. Some people have hit the lottery with million dollar appreciations, not me.

 

[brucethebroker]

Of course you know this, but the saved rents of 40+ years have to be considered. Compare rent today to what you paid on your last apt./rental home-gasp!! That (and privacy) is the true value of ownership, IMHO. Great post.

BTW, my experience of lowered appreciation is similar as I live in the Midwest.

 

[COcheesehead]

I think I made money on every house except one. I remember making double on the house we owned from 2012 - 2018. Our current one is up 33% since we built in 2020. The one we didn’t make money on we sold in 2011 and lost about 10%. The area was overbuilt and the market was bad.
The biggest real estate bang for our buck though was owning a commercial building for about 10 years. When we sold, it made us life changing money.

 

[Jerry1]

The only house I made money on was my first house. We bought it at the height of interest rates and as they came down, our house appreciated significantly. Our second house was at best break even. We lived there 26 years and while I got more that I originally paid for it, I don’t think I covered all the improvements I made to it over the years. Our third and current house is sitting at a loss. We bought it, gutted it, rebuilt it and then put in a swimming pool with some landscaping. I feel that if I live here 10 more years it will be worth it. I’ll get some appreciation between now and then and I’ll also get the value (depreciation) from the pool and improvements. My goal has never been to make money on a house. I’ve enjoyed improving the houses I’ve owned. Plus, I compare my cost to what other options I would have, like renting. For example, if all in, I lose $150K on a house over ten years, I just look at it and ask myself, Where else could I have lived for $15K per year. I absolutely know that’s over simplifying it, but I’m good with that. I’ve never lived in my Dream Home, like W2R , but I’ve come pretty close.

 

[Alan]

We bought our first house in Leicestershire 1977 and when we moved “up north” to Yorkshire 18 months later we sold it for 45% more. We lived in our next house for 6 years and sold it for approximately double what we paid, moving to Scotland. The house in Scotland was brand new and when we moved back to Yorkshire 18 months later we sold it for 30% more. We sold that house 7 years later and it almost exactly doubled in value. All those house purchases and relocations were company moves so the companies picked up the fees and moving expenses.

We bought our house in Baton Rouge in 1992 and sold it 12 years later. Again it was about double the price we paid for it but over the 12 years we had made many improvements so I think it really had only kept pace with inflation.

We stuck the funds from the last house purchase in a Vanguard mutual fund and lived in apartments for the next 12 years, during which time the fund had doubled in value. We then moved to England and bought our current house the following year (2017). This is our forever house so any appreciation will be to the benefit of our children.

 

[REWahoo]

^ History says a "forever house" for you is a big financial mistake. You need to keep selling and moving!

 

[rodi]

First home bought in Bellingham WA in 1991. Sold 2 years later. If I'd kept it, it would have appreciated 21%/year. Proof that location is everything... this was very much a starter home (2/1, but a walkable neighborhood with lots of amenities.)

Second home purchased in suburban Philly in 1994. Sold 8 years later. If I'd kept it it would have appreciated 12%/year. Again,not a fancy or large house but location location location... walkable to septa train stop that serviced 2 different lines, restaurants and shops walkable.

Current home in San Diego. bought in 2003, added a granny flat which adds value but also makes it not zillowable... (multifamily). But I have a good guess of what it's currently worth based on neighbors with no granny flat and what the added value is. Using neighbors with no granny flat (since we had to pay for that) the appreciation is about 14%/year. Of course, at times (2008/2009) it was worth a lot less than what we paid.

Another way of looking at, different from the OP's 'if you sold it now'

First house: sold for 6% over what I paid.
2nd house: sold for 36% over what I paid
3rd house: not sold, but current value, 183% over what I paid.

 

[MichaelB]

Was just reviewing, and thought I'd share the summary of our home ownership. We've owned 4 homes in our lifetimes, from an investment standpoint they weren't great returns...

• Bought our first home OH in 1981 for $58K , lived there for 8.5 years, it has appreciated from 1981 to 2023 3.1% per year.
• Second home bought FL in 1990, lived there 3 years, it has appreciated 3.6% per year.
• Third home bought IN 1993, lived there 26.5 years, it has appreciated 2.8% per year.
• Current home bought NC 2019, lived here 3.5 years so far, appreciation 11.4% per year so far. Good times so far...

I am sure some of you have had far greater appreciation, but my career took me to flyover country mostly...

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?

 

[Gumby]

We currently live in the one and only house we ever bought. It is likely worth about 4 times what we paid for it 31 years ago (although we did renovate and add on, so that's not just price appreciation). I don't expect we'll ever own another.

 

[CardsFan]

First house:
Bought 1981 for 53,000. Sold 1988 for 135,000. Just over 14%/yr compounded annually. Hot market in Massachusetts.

Second house:
Bought 1988 for 130,000. Sold 1999 for 240,000. About 5.5% compounded annually. This and the others are in MO.

Third house:
Bought the land in 1996. built house in 1999. All in cost was about 240,000
Sold in 2009 for 375,000. About 4.4%

Current Condo:
Bought in 2009 for 163,000. Current Zillow value 250,000. About 4.4% compounded annually.

So, all together, we probably beat inflation by several points. I wish I could take credit for real estate investment prowess, but it was pure dumb luck.

 

[Sue J]

We bought our first and only home in 1983. It was $60,000 and we put down $15,000 and mortgaged $45,000. It's now worth around $210,000 according to Zillow and that seems about right.

In July, 2023 it will be 40 years here. It's been a very good decision.

 

[Alan]

^ History says a "forever house" for you is a big financial mistake. You need to keep selling and moving!

We were super lucky with this last purchase because between moving to England and buying a year later the Brexit referendum happened and the house money savings increased by over 30% because the GBP crashed against the USD so moving the house money over was like winning the lottery.

 

[Ronstar]

Bought a lot in 1982 for 20k, built house for 60k in 1984, built detached garage in 1990 for 25K, sold in 1994 for 185k - so about 80k appreciation on 110k total investment in 10 yrs or about 76% appreciation.

Bought condo in 2002 for 181k, sold in 2019 for 297k. So 116k appreciation in 17 years or 64%

Bought current lot in 1992 for 84k. Built house in 1994 for 240k. Detached garage, new roof, remodeling totaling about 60k. Don't have a clue what it's worth - maybe $700k - so maybe 82% appreciation in 20 years.

Hard to assess appreciation of houses since I did most of the work myself.

 

[disneysteve]

We bought our one and only house in 1994. We paid $142,000. Today it’s probably worth $300,000-$350,000. I honestly don’t care what it’s worth. We didn’t buy it as an investment; we bought it to have a place to live. If we sell it, we’ll need to buy another one.

 

[MichaelB]

I remember when we bought our house in NY in ‘98. We interviewed buyers agents, and one said he was so certain home prices were going to decline he sold his house and would rent until prices came down, and then he would buy back iau a much lower price. 6 years later prices were close to 2x and since then have remained at that level.

My folks bought a house in ‘67 and sold it 32 years later for a little more than 2x the purchase price. The house my aunt and uncle lived in for 40 years appreciated even less.

The first home we bought was in Caracas. We sold it 12 years later and were lucky to get anything at all, and paid dearly to get what we could out of the country.

 

[athena53]

Fun exercise- I bought my first house, a 2-family, with a friend in NNJ and we paid $89,000 for it in 1979. It sold last year for $685,000 but that's about 4.7%/year. Commuting distance to NYC is a Big Deal. My Ex and I bought a house in 1984 for about $300K and sold it for $550K when we divorced in 1997. They've done so much to improve it that the value right now is irrelevant. I had similar success on the house I bought after the divorce- bought for $350K in 1997 and sold for $525K in 2003. Current estimate is $885,000, so that's appreciated less over the years.

Second DH and I barely broke even on the house we bought in a KC suburb in 2003 and sold in 2015 when the cost of improvements are taken into account but this one looks to be a better deal- bought in 2015 for $242,000 and Redfin says it's worth $478,000. Based on sales in the neighborhood I'd put it closer to $400K before mortgage rates went up, so less than that now.

I can definitely say that appreciating real estate values have been a factor in ER; late DH cleared $100K when he sold his house in NNJ after we married and moved to KS. We didn't need all the equity released by both sales when we bought the new one (LCOL area) so most of it got invested.

 

[Andre1969]

My history is pretty brief...
1994, bought a condo for $84,000, at the age of 24.

2004, sold condo for $185,000.

2005, my grandmother put my name, and my uncle's name, on a second home she owned that was across the street from her, so we were all 1/3 owners, joint tenancy in common. I had moved into the house in late 2003, clearing out my condo and fixing it up to sell. I took out an HELOC on the place, with a $175K limit. I invested some of that money, used some of it to build a garage and do other repairs on the house, bought a '76 LeMans, used some of that money to fix up a '57 DeSoto, and at one point a few months after I bought my 2012 Ram, I paid it off with money from the HELOC. It was all great, until the 10 year draw period was up and they switched it to a 10 year fixed, at 4.99%. I paid that off fast, with the last payment being like Jan or Feb 2018.

2018: bought my current home, for $630K.

2022: finally sold the old family homestead, for $335K. Grandmom died in 2015, and at that point my uncle and I became 50/50 owners. Unfortunately I had been vacated from it too long, so I lost the capital gains exclusion for it being my primary residence. I'm not sure what the ultimate cost basis is going to be, as I haven't gotten my taxes back yet. It appraised for $222K at the time of Grandmom's death. I know the cost basis for my 1/3 and my uncle's 1/3 is zero, since she gave it to us, rather than us inheriting it. I figure grandmom's share would be $74K, 1/3 of the value at time of her death, so I'm guessing that means $37K of cost basis goes to both my uncle and me. I was also able to come up with about $39,000 in write offs, for the garage, electric supply upgrade, and heat pump/central a/c. So hopefully that goes against my part of it. I also harvested some stock losses, in the hopes of offsetting this gain to some degree.

2023: the state assessment pegs the house at something like $795K. But Redfin thinks it's $867K, Zillow $846K. None of them take into account the 36x60 pole barn garage wtih 900 square feet of loft storage that I had built, though. But, at this point, I'm hoping this is my "forever" home, and that one night, in about 40-50 years, I slip off peacefully, in my sleep...

 

[W2R]

We bought our one and only house in 1994. We paid $142,000. Today it’s probably worth $300,000-$350,000. I honestly don’t care what it’s worth. We didn’t buy it as an investment; we bought it to have a place to live. If we sell it, we’ll need to buy another one.

I sure can relate to your thoughts about your house!

To me, my house is not an investment, it's a purchase - - - it's WHY I invested, to get the money to buy a wonderful place to live in for the rest of my days.

And, I did it. I have my Dream Home and never plan to move again.

As for my house history....
I had two houses during my marriage to my late ex-husband. The proceeds from selling the first one were used as part of the down payment for the second one, and he got the second one in our divorce. So, I got nothing from those houses.

Then after my divorce I bought a third house on my own, and when I sold it I used the proceeds from the sale of that house as part of the payment for my Dream Home. So, I guess you can say I never saw a cent from any of these houses. And yet, here I am, living in my paid off Dream Home! That's a huge value to me.

 

[Aerides]

Brief here too:

Bought my first solo house in 2002 for 125k, a villa. Sold in 2005 for $260. That windfall started me on the road to having a good savings account. Zillow says it's worth $350 today.

Moved in w/DH, who had bought this house for around $200 in 2000. Today zillow says $600 but comps and upgrades say I would list and sell for $750, easily.

 

[RobbieB]

Haven't made any money in real estate.

Townhouse in Huntington Beach, CA - sold for buy price but company paid costs and move. Should have kept this one and rented, but low on dough at the time.

Still in second house. No mortgage, just PT and upkeep.

 

[ERD50]

You're doing better than me. In rough terms, starting with a townhouse in 1977, and SFH from 1981 on to 2021 (not counting the current home, too short of a time to be meaningful). All in N IL:

Years CAGR %
4.0 ___ 9.47
11.0 ___ 1.85
29.0 ___ 0.54

using this for an excel formula:
https://www.investopedia.com/ask/an...ng-compound-annual-growth-rate-cagr-excel.asp


Even worse after considering improvements. But as others have said, you'd need to subtract out rent, and other intangibles. But to the point, as an investment on simple terms, not great. But that's OK.

Interesting to consider the numbers.

-ERD50

 

[cbo111]

Long and somewhat boring list of my properties:
1. Condo in NorCal 1987, paid $22K. Sold in 1989 for $22.5K. With fees and taxes, loss of about $1,500.
2. Purchased home in NorCal 1989 for $95K. First wife got it in a divorce settlement, so its hard to estimate gain/loss. Well, except that I lost the whole thing.
3. Bought home in Florida panhandle 1996, paid $132K. Sold it in 1998 for $125K. After taxes and fees, net loss of about $10K.
4. Bought home in Florida panhandle in 1998 for $155K. Moving on up! Sold in 2003 for $168K. Net profit about $10K.
5. Bought a residential lot in a golf community in 2003 for $95K. Purchase was for investment, or less likely scenario we might move back and build on it. Never built on it and sold 2005 for $300K Tidy profit of about $175K after brutal capital gains and fees.
6. Bought home in SoCal 2006, paid $468K (living large now). Sold it in 2015 for $485K. After taxes and fees, net loss of about $27K
7. Bought home in SW Florida 2015, paid $330. Still live here and current Zillow estimate is about $650K.
I never realized how many times I did the home purchase thing compared to many of you. I suppose being in the military and defense industry had something to do with it. And ironically, the sale of the empty lot netted me far more than all my other homes sales combined, by a good margin.

 

[Out of Steam]

I've noted elsewhere on this forum that my history of home ownership hasn't been particularly profitable due to poor picks and market timing. I've owned a house for all but one year since 1987 (a total of four) and have less than $200K in equity.

The subtitle next to my name on another online forum is "Real Estate Skeptic".

 

[marko]

^ History says a "forever house" for you is a big financial mistake. You need to keep selling and moving!

The home where my brother lives is the only place he's lived in all his 69 years. He and I grew up there, as did our father and grandfather. It is owned by a trust and was bought in 1879 by our great grandfather.

IMO, it's about as "forever " as you can get!

DW and I reluctantly sold our own forever home two years ago. My mom grew up there as did her father. Not unusual at all in old New England towns for third and fourth generation owners.