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Is Your Home Value Skyrocketing?

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David in MN:
I did the paperwork exercise to refi the home (yet again) because there are some opportunities right now. Granted it's mostly about shaving points these days because we're about 9 years from paying it off (not bad for 39 year olds) but hey an extra few bucks per month going to principle is great.

In the course of the conversation with my lender he asked if I knew the home value. I always say no because I don't keep up on the real estate market and I don't really know but I spitballed a number. I was wrong. I was wrong by about 20%. When he came back with the assessed value of my house I almost choked. Don't get me wrong, I like my house but that number seemed so far off as to be wrong. I looked up local realty and holy crap; it was right.

Put it this way... We bought at the height in 2006 and have been below our purchase price the whole time we've been in the house. Not underwater because we did the big down payment thing but since bottoming in ~2008 we are roughly 45% above bottom. That's in 12 years. But all the real growth has been in the past 5. And 2020 has been an economic catastrophe except for my house.

Curious if others see this pattern too.

Morning Sunshine:
If our house sells right now, we will have made back the purchase price PLUS all the interest we have paid over the years (we are paid off now).  So basically, we are doing our best to sell right now.  We are hoping to buy something MUCH MUCH cheaper for a few years until the real estate market levels out and we can buy our dream land and build when things are not so crazy.

We bought it for 370 in '06, could not sell it for 260 in '11, and are asking 600 for it.  At that it is the cheapest house with over 10 acres in my county, by about 2-300k.  But we do not have a barn and fencing and granite counter tops people with money for horses want.  To me, it seems better to buy my house and spend 100K on those things and still come in cheaper than the others, but whatever.

DDJ:
I have the opposite situation.  My parents built in rural Ohio in 2001 and now that they passed my brother and I own their house.  We are being told that it is worth the same as they paid to have it built.  So you must be seeing the first rule of property investments "location location location"

David in MN:
I don't know about location. I'm admittedly in a very strange suburb because we're almost all middle class but we also have the million dollar properties on the Mississippi. It's a bit of an unusual place so much so that our football coach became governor (Jesse Ventura).

But... Let me use some trading lingo here. My house has always been worth about the same price. Somewhere in the mid to low $200k valuation. At the height of the housing crisis when things were falling apart it never dipped below $200k. We felt reasonably sure that 200 was the bottom and 250 was the top. Which is fine by me because it was relatively stable and predictable and even on the low side you knew kind of where you stood and the value held. To think another way, it's a good market to long term plan a family but a lousy area to flip a house.

But now everything has changed. Forget 250... Comparable sales are testing the waters getting darn close to 300. If there's support and 300 becomes the new bottom, look out. For a run of the mill Midwest commuter split level? That feels real wrong.

Remington:
This seems to be the case in the Cleveland suburbs. Both of my neighbor's sold this summer for over their asking price. In both cases the offer was made the day it went on the market.

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