Just As I Thought

Assessments

Here’s another thing I don’t quite understand.
My house was built in 1983. It was initially purchased for $103,000.
15 years later, it had increased in value by $28,000.
In the last year, between 2003 and 2004, it increased in value by $61,000. In one year, it’s value increased by more than double the amount it increased in FIFTEEN years. It’s now worth $128,000 more than it was when I bought it in 1998.
Yeah, this is a financial windfall for me. But I have to ask: is this sort of thing good for the economy? Is this another bubble that’s going to burst and leave us all with mortgages that are for more than the worth of the house?
And this incredible rise in housing prices is making it more and more difficult for people to afford a home, even with a job. Where are people getting the money to move into million dollar houses, and why don’t I have a job like that?

Ah, the thoughts that whiz through your mind when you’re looking at your real estate assessment.

2 comments

  • As they say…What goes up…

    Yes you are correct it cannot sustain that kind of growth and the bubble will burst. However I question the 28k in 15 years? Are you sure that’s correct. Was the market in that big of slump?
    You’re talking about maybe a 1% increase per year. In anything other than a depression those kinds of numbers in the housing market over a 15 year span are unheard of.

    More likely your were given the wrong numbers in years past? And it was undervalued and now its caught up and swung the other way and is a little over valued.

    Remember Real estate agents can say anything they want. It easy to say this is a 300,000 home but in the end the market place dictates the price and your home its only worth what someone is willing to pay for it.

    The real estate market will continue to move up and down in the years to come, and that, like the movement in the stock market is normal.

    If you can ride it out for ten or fifteen years or more you will make money. You did.

  • Well, the 28K seems hard to believe, but here are the actual numbers from the Arlington county assessments:
    1987: originally purchased for $103,605
    1997: county assessment: $119,900
    1998: I purchased for $131,500/assessment $119,900
    1999: assessment: $120,100
    2000: assessment: $122,500
    2001: assessment: $128,400
    2002: assessment: $151,100
    2003: assessment: $198,000
    2004: assessment: $259,400
    My neighbor sold her house, the same model as mine, for $280K last year, so the assessment (as always) is well below the market price.
    Very, very weird how the assessments jumped significantly higher just after the terrorist attacks of September 11, one of which happened just down the road from my neighborhood.

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