When people say 3% appreciation - what does that mean? (sale, price, construction)

[hammy5]

I have seen that you should expect a 3% appreciation of your house. Is that per year that you have owned it? Is that for the way you bought it or does that % go up if you did things like finished a basement or added things like a fence, central vac....those types of things. I am trying to figure out a fair price for my house as I think I am to high right now.

When we bought our house in Dec. 2003, we paid $374,000 for it and it was 2200 Sq feet. Since then, we have added 1000 sq feet in the basement (professionally done built ins,granite wetbar, bathroom, bedroom, and large playroom), a privacy fence, central vac, heated garage, closet organizer, and gorgeous landscape lighting. So what would a fair price to ask be? Can I just expect to get back what I paid for it and call it a day?

Kristine

[tamitrail]

Not necessarily. What is your market like? What are the comps for your area? I think in a normal market you can expect appreciation. Or if you bought your house a very long time ago. Normally all the stuff you put into it would appreciate the value of your home, but in today's market, it's anybody's guess. What does your realtor say your home is worth. Did she do a CMA?

[hammy5]

The comps are all over the place. Seems like houses are selling anywhere from $500,000 to $219,000. That is a huge difference. My market is not horrible. I think she said that average time for a home to be on the market is 120 days. So that is not bad. I just want to make sure I price correctly so that I can just get it sold. I know I am not going to make a killing on it, I just would like to get "some" of my money back. I figure we spend over $100,000 on upgrades, but I would be happy to just get 1/2 that back.

Kristine

[tamitrail]

So does your realtor say you can list your house at $424,000? I know you posted on the other thread about your listing. What is it listed at now and have you had any showings at that price?

[hammy5]

Originally Posted by tamitrail

So does your realtor say you can list your house at $424,000? I know you posted on the other thread about your listing. What is it listed at now and have you had any showings at that price?

I have not talked to my realtor about it yet. I have just been thinking about it today and wanted to throw it out there.

18 days ago we listed our house at $469,900 and had no showings. Last Thursday we reduced it to $447,500 with no showings. I am just wanting to get it over with so I am thinking of just listing it for $420,000 and calling it good. I still have some wiggle room at that price.

Kristine

[middle-aged mom]

The national average appreciation factor is about 5% going back as long as it's been tracked.

This number includes places with cyclical, short term, double and even triple digit annual appreciation and serious market corrections.

Stats like this are broad views and compare the average sale price year over year and is easily skewed by tear downs, new construction and home improvements.

What matters is what's going on right now in your market and local market trends. You need local Realtor guidance to figure out what's going on and how you might reasonably expect to get, based on local conditions.