One of the most common questions of potential home buyers and sellers in Boulder County is “have homes appreciated or depreciated”. The best way to answer this question is to have me or another qualified Realtor out to your house to do a comparative market analysis. But many people are not that serious and are just curious how their biggest investment is faring in today’s tough real estate market.
The next place people seem to look is Zillow.comor other online home price estimation tools. Easy, absolutely! Accurate, not so fast. To see more on the accuracy of Zillow, take a look at a previous blog post of mine titled “How Accurate is Zillow?” The gist is that on a bulk basis their algorithm seems to work pretty well but on an individual basis the value quoted I have found to be quite wrong.
Another tool which I find interesting is the “Home Price Calculator” on FHFA’s website. This tool asks for two inputs; the price of the house at time of purchase and the quarter in which a house was purchased. The tool then takes the average appreciation for the whole metropolitan area in which the house sits and gives you a value to the nearest quarter.
Let’s look at this a bit more closely to see how well it works. I chose 3 properties at random from today’s sold list. The only criteria was that they needed to have been sold at least one other time since 2006.
Property 1: 207 Iroquois Boulder, CO 80303 – Sold May 2002 for $362,500 and sold again for $415,000 on July 19, 2010.
The actual appreciation was 14.5% and the predicted price appreciation was 15.4%. Here is a screen shot of showing the estimated value of $418,199. Very close to the actual of $415,000. The predicted annual appreciation for this Boulder house was an average of 1.9%. The actual annual appreciation was 1.8%.
Property 2: 227 Springs Cove Louisville, CO 80027 – Sold for $277,000 in April of 1998 and then sold again for $453,000 on July 16, 2010.
In this case the actual appreciation was less than the model expected. Actual home appreciation was 63.5% or 5.29% per year. The predicted appreciation was 71% total or 5.9% per year.
Property 3: 6156 Willow Lane Boulder, CO 80301 – Sold for $177,500 in December of 2002 and then sold again for $199,500 on July 10, 2010.
The appreciation of this Gunbarrel condo again matched closely to the predicted model. Actual average home appreciation was 1.7%, predicted appreciation was 1.8%.
This tool seems to work well but it does have limitations. I tried to chose houses that did not have any major upgrades. The model does not allow for any upgrades, therefore it doesn’t account for any increases in value in comparison to the average.
As always, the current price is what a willing buyer pays a willing seller. As a Realtor I can’t change market value but I can provide you the best information and marketing so that you can maximize your proceeds.
Quick Fact: Average annual home appreciation in Boulder from 1993 – 2009 = 11.1%