Home values and appreciation have been a hot topic for us lately. Today I want to show an example of just how much equity you can gain through appreciation at the current market rate.
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We’re always talking numbers, and I hope you’re not sick of me yet! Today I wanted to share a flier that was sent to me recently about appreciation in our market. It shows 6.1% appreciation over five years.
We fear that many people think this is fake money or think that these numbers didn’t really happen. The graph in the video above shows how a $340,000 home would appreciate if it increased by 6.1% over five years. In the fifth year, the home would be worth $470,592.
So I took this rate and applied it to the median home price from five years ago in February, which was $180,000. As of last summer, median prices hit $275,000, which is a five-year change of nearly 35%. If you apply this to the $340,000 house from the graph above, you can see that it was almost exactly right in its prediction.
In the last five years, homes have in fact appreciated 6.1% on average based on median price in Salt Lake County. That’s more than $120,000 in five years!
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It’s the same over the long term, as well. The home neighboring the house I grew up in increased in value 4.5 times over in a 34-year time frame leading up to this year.
I don’t think values will double over the next decade, but that’s the path we’re on.
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I don’t think houses will double in value over the next 10 to 12 years, but then again, that’s what has happened the last four straight decades in Salt Lake County, and it’s the same path the market has been on for the last five years.
We’re not pushy salesmen, but we want you to know that in a rapidly appreciating market, the best deal you will get will be on the house that you buy today. I’ve seen too many heartbroken young buyers who wait around to buy a home and realize that their biggest mistake was not buying a home when they were qualified and ready.
If you have any questions about the Salt Lake market, give me a call or send me an email. I’d love to hear from you.
