Our Property Value Has Already Increased By 18%!!

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Have you been thinking about buying a house lately? Are you wondering if now is the right time? Well, with rates as low as 3.25% (and maybe even lower in your area) for a 15 year loan, I’d say that’s a pretty clear indication that the time is right. Also, in using our own house as a gauge for the market, I have seen an upward shift in property values.

We bought our house in August last year, and thanks to a great site called “Zillow“, I can see that our purchase was timed perfectly! Take a look at the chart below:

As you can see, our house was once valued at about $125,000 in 2008, but then the market really started to tank. By January, 2010, the Zestimate was as low as $86,000, and then do you know what was introduced? The first time home-buyers tax credit!

When my wife and I first heard about this credit, we really started looking at properties, but after I pondered the market further, I noticed that home prices were beginning to go up, even though the economy was still slumping. This upward swing was most definitely a result of the potential $8,000 tax credit. Figuring that home prices would fall after the credit was over, my wife and I decided to save up our pennies and wait.

Sure enough, in early 2011 (when the tax credit was over), home prices started to take another dive. When we purchased our home in August, 2011, the market was at an all-time low for our property (Yay!! I love buying things at a discount). With this drop in value, we were able to purchase our house for about $78,000! Today, about 7 months after our initial purchase, the Zestimate on our house is up to $92,000! This means that our property value has increased by18% in the last 7 months!

Is Now The Right Time to Buy a House?

I’m obviously feeling pretty good about our purchase right now, but the real question is, what about those of you that are thinking about making a real estate purchase in the near future? Is it a good time. Will home values continue to rise, or will the economy take a turn for the worst, leaving home values lower than ever before?

Of course, I don’t have a crystal ball and can’t predict the future with 100% accuracy, but at this current moment, the economy seems to be in its recovery stage. The stock market is on the rise (the Dow has been above 13,000 for a couple of weeks now) and is a lot less volatile compared to what we saw last year. Also, jobless claims are decreasing steadily and are at the lowest numbers since early 2008. Things seem to be looking up and there are still plenty of deals on houses out there.

There is really only one trick to getting a good deal on a house. Homework and patience. Diamonds in the rough are often difficult to spot, but if you’ve done your research and know the value of homes in your local area, you’ll soon find a gem of a house for cheap. And, if you get it cheap enough, you won’t mind if the value goes down a little at first, because you’ll still be on top!

Did you recently buy a house? Have you noticed that your value has gone up since your purchase?

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

26 Comments

    • Above the water is good. Hopefully more of the U.S. population will join you in that. It’s time to set fear aside and burst into a new robust economy! I’m ready!

    • Me too CFM. If the value of housing drops again, that’s bad new for everyone….

  1. hi Derek, I was not as fortunate as you were, I purchased a property in Spain in August of 2007 and the credit crunch/crisis began here in Europe in September of 2007. And as you can probably see I am a mortgage adviser but sadly I made a huge boo-boo costing me almost €50,000 but hey what doesn’t kill you makes you stronger.

    P.S I must work on my timing.
    mortgage broker recently posted..Recent Changes to Stamp Duty

    • That sounds rough. You definitely weren’t the only one though. I know quite a few people that bought their houses right before the bottom fell out on the market. I like your attitude though!

    • Yep. That moral boost could really allow the overall market to take off. I can’t wait!

  2. Wow, good timing for you guys! Our current home has gone up $5K in this last year since we bought it, so we’re doing good. But our old house that we’ve since turned into a rental had lost a good $20K in value over these last couple years. But just now when I looked it up on Zillow, it is actually valued a couple thousand over what we paid. Huh, market IS coming back 🙂
    Deanna Koch recently posted..Why Do I Get Undressed?

    • Yeah, I wouldn’t call our timing skill. It just took us a while to get our downpayment together…. 😉 It sounds like you’re doing a good job though. Renting out your old place is a pretty smart move.

    • Hopefully you’ll see an increase soon! Thanks for the comment Michelle.

    • Who can really say for sure what your house is worth, but Zillow is a good place to look since they keep a record of all the home sales in the area.

    • I bet it really didn’t make a huge difference. Plus, it was probably pretty nice for you to get all that cash back during tax season! 🙂

  3. I’m not even going to tell you how LOW Zillow priced our house relative to when we bought it in 2004. (Actually I posted it already on my blog, so I guess there’s no secret). But I’m not here to rain on your parade. Good job with your home purchase! My personal feeling is that we’ve seen the lowest of the low and prices will increase, but we’ll be heading upward very slowly (for most of us).
    MyMoneyDesign recently posted..Will Dividend Stocks Help Me Retire Early?

    • Well, it could have been worse! You could have bought your home in 2006! Don’t be discouraged, home values are coming back. Just keep making those payments and get rid of that debt!!

    • I often feel that Zillow is low, so who really knows…. It is fun to look at though.

    • Haha. Yeah, I’m aware that Zillow isn’t the master of home appraisals, but it’s still fun to see an estimated value on our house! Once we are all done with our renovation, I bet we could sell it for $120,000. I’m guessing that we’ll live here for quite a while though. 🙂

    • Sounds like you did an awesome job too Christa! It feels good doesn’t it? 🙂

    • That’s awesome! What a great time to buy! Time to watch your home value go up! 🙂


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