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Monday, July 02, 2007

property values

Just heard from Don's parents that a house on their street -- ten blocks away from us -- has sold for $375,000. And it was just over half the size of our house, on a smaller lot (although recently rehabbed, if it's the one I'm thinking of -- and they did a nice job). That's good news -- it means our house will be worth quite a bit when we're done with the renovations, and it's worth the money we're putting in.

The breakdown so far:
Our house is about 2200 square feet, on one third of an acre of land. It's got three bedrooms, and by the time we're done renovating it'll have either three full baths or two full and one three-quarter bath (depending on who wins that argument), an open floorplan with a main floor family room in addition to the living room, and a moderately "gourmet" kitchen.

We paid $220,000 for it in January of 2006 (it was listed as a four-bedroom, which affected the pricing somewhat then and will affect pricing later by its absence but not absurdly so), and have so far spent (or committed to spending) just over $50,000 on a new roof, new windows, and central HVAC. The cost of the rest of the work we're doing, both structural and finishing, is comparatively negligible, since we're doing it all ourselves and don't need contractors. [Example: we've completely changed the floorplan of the first floor, both removing and adding walls, replaced all the floor joists, and installed a level subfloor for about $1200 -- just the cost of supplies.] This isn't to say that, for instance, the entire house's supply of drywall isn't going to be ridiculously expensive -- but comparatively speaking, DIY is always cheaper. If you know what you're doing. Hospital bills can add up, if you don't.

We plan to live in this house for at least the next ten years or so. But if we don't, at least we'll be able to afford to sell it. Mind you, I'm not endorsing real estate inflation. I'm just grateful that we managed to get in early enough that we could get the house for a reasonable price. As a fixer-upper, it was (rightly) discounted some. But I've seen fixer-uppers now selling for finished prices, which sucks. If you're in the market to buy, be mindful of neighborhood property values and trends, and make sure you're really getting what you're paying for. It can still be done in the market now, it just takes some research.


Anonymous said...

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Maryam in Marrakesh said...

Sounds like a great investment!