During my latest past sales review for the 20176 zip, I started noticing that not all recent sellers who bought their properties in the past few years are losing money these days (although it sure does feel like it). In fact, some are even making money, albeit relatively small amounts. Just who are those lucky people? Anyone who bought in 2004 or before, and they’re seeing an average annual increase of between 3% and 4%.
As with everything in life, there are a few exceptions to this rule. But for the most part, anytime I clicked on a sales record and noticed a yearly appreciation percentage instead of a depreciation percentage, it was for a property last sold in 2004. That would make sense in light of the fact that the market here peaked in 2005, but I guess it’s interesting for me to see it in such cold, hard numbers. It’s so…literal.
What does this mean for 2008’s buyers and sellers? Sorry to sound like a broken record, but if you bought in or after 2005 and you don’t have to sell your house, you’re better off taking it off the market and trying again in another year or so*. Not only will you be doing yourself a favor, you’ll also be doing your bit for the economy by removing a property from an already overloaded inventory. If you’re a buyer, investigate 2004 prices for the properties you’re interested in and their comps, then increase that by 3% to 4% over the past 4 years, and you might have a good ballpark figure for current value. I know that might seem a little farfetched, but fair market value is so volatile these days that it certainly wouldn’t hurt to look at it from a different perspective. And besides, what have you got to lose?
*Unless the new President does something drastically stupid immediately after being sworn into office, or there is some other catastrophe, I think the market will pick up in spring 2009 in response to the new political environment. That’s just my current pet theory.