Monday, January 7, 2008

An example of the Boom and Bust

Here is an actual example of a home that's for sale in the MLS today; historical data from the County Assessor's web site show the history of our recent market:































DateActionPrice
12/1999Purchased from builder$204,000
4/2005Sold$390,000
11/2005Sold$519,000
1/2008Listed in MLS$320,000
   

I see a lot of interesting points in these 4 simple rows.

1. The appreciation from 12/1999 to 1/2008 represents a 4.5% annual appreciation rate. That is just about equal to the long-term rates for Phoenix. It's as if the craziness of 2005 never happened!

2. This assumes the home will actually sell for $320,000. That might be a tall order in today's market. If it actually sells for 93% of that figure ($297,600), then your appreciation rate drops to 3.8%.

3. The home appreciated $129,000 in 7 MONTHS in 2005. That's 33%! Yep, sounds about right.

4. I was shocked that somebody paid $519,000 for this home in 11/2005, since by then the party was pretty much over, and homes were beginning to stay on the market while sellers got nervous. I wanted to see who the realtor was that advised their clients on this one, but a little further research shows it did not get sold through the MLS. Hmmmm... Did somebody buy a FSBO without any representation...??

Your shaking his head Realtor,

Chris Butterworth

[tags] market analysis, appreciation rate, FSBO, Fletcher Heights [/tags]