Author Topic: Example of phenomenal RE appreciation  (Read 1602 times)

Mr. Green

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Example of phenomenal RE appreciation
« on: June 03, 2016, 12:20:49 PM »
I'm invested in a home renovation through RealtyShares and now that it's finished I saw some info about the original house that I thought would be interesting to post.

https://www.redfin.com/CA/Los-Altos/315-Quinnhill-Rd-94024/home/777619

The developer I invested with bought the property in 2015 for $2,250,000 and then tore the house down so they could build a luxury home that is now listed for $5 million+. The Redfin page also has property sale history on it near the bottom where it shows the last time it was sold was in 1976 for $107,000, possibly the original owner. It does the calculation on annual ROI, showing the owner that sold the house last year earned an 8.2% annual return on the property over 39 years. Holy crap! Just shows you how crazy some California markets are, compared to the long term historical national average cost of housing only rising at the rate of inflation.

ketchup

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Re: Example of phenomenal RE appreciation
« Reply #1 on: June 03, 2016, 12:29:53 PM »
That is nuts.

My mom just sold her house (in a nice area) and I figured out that it averaged 0.8% appreciation over 15 years.

A coworker of mine sold her house last year for $10K less than she paid for it nine years earlier.

A different coworker just walked away from a house via a short sale netting $100K less than he paid for it in 2008 (~$140K vs ~$240K).  And they had done upgrades to the house and it looked really nice.

Appreciation goes both ways.  Or it can go nowhere.

GuitarStv

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Re: Example of phenomenal RE appreciation
« Reply #2 on: June 03, 2016, 12:38:23 PM »
My house was worth 400k three years ago, and now they tell me it's worth 650k.  Apparently it was a way better investment than index funds.  :P

onlykelsey

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Re: Example of phenomenal RE appreciation
« Reply #3 on: June 03, 2016, 12:41:30 PM »
It's always a good idea to see what zillow (or whatever the database is you're using) thought the worth was when you bought, I think.  My house went from 480K (when I bought 2.5 years ago) to nearly 630K a couple months ago... BUT the day before I bought it in 2013, zillow thought it was worth 520K.  So it seems a bit rosy on my property generally.

ketchup

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Re: Example of phenomenal RE appreciation
« Reply #4 on: June 03, 2016, 01:04:37 PM »
It's always a good idea to see what zillow (or whatever the database is you're using) thought the worth was when you bought, I think.  My house went from 480K (when I bought 2.5 years ago) to nearly 630K a couple months ago... BUT the day before I bought it in 2013, zillow thought it was worth 520K.  So it seems a bit rosy on my property generally.
Yeah, I take the "Zestimate" with a grain of salt.  My rental house that I bought for $18k in 2012 is allegedly worth $114K.  The market has recovered, but it's probably worth about $25K, $30K if I'm really lucky.  If anyone thinks it's worth $114K, I'll sell it to you for half that.

Mr. Green

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Re: Example of phenomenal RE appreciation
« Reply #5 on: June 03, 2016, 03:57:15 PM »
I'm definitely not advocating for using RE appreciation as an investment. I just thought it was a crazy example of someone making out like a bandit. It seems even crazier still when you consider the fact that the developer then tore down the house and built a brand new one, which is now listed for more than double what the developer paid for the property.