When calculating median home prices and YOY gains, typically we lump all single family homes in a certain neighborhood together and condo sales from the neighborhood together for an aggregate median and rate of appreciation.
Recently, I discovered a new tool that actually allows me to look at a certain neighborhood with the home’s appreciation rates broken down by era home, size home, bedroom counts, etc.
Of course, you can do this on the MLS too, but the amount of time it would take to do it for each zip code would be quite the undertaking, to say the least. Furthermore, the tool I found uses same house sold twice to calculate the data. This allows me to see trends in the market easier than testing it on the MLS for accuracy… which I’m doing.
It’s a bit preliminary, but I’m already noticing a pattern as I look at the numbers. Here are a few of my observations:
Bigger is not better in Seattle. Currently, smaller homes/condos (2 bedrooms or less) in many of our urban neighborhoods are appreciating faster than all other sized homes. If it’s important to you to realize large returns on your investment interests, then it might actually make sense to buy a smaller place!
Homes built after 1998 are appreciating faster than the rest (these are likely townhouses). This might mean that condos and townhouses might actually be appreciating faster than single family homes. I’m testing my theory on the MLS now, and will post the results shortly.
Millennials are a huge group of buyers, and they typically do not have the mechanical ability, vision, nor the time as a whole to make repairs. If you’re thinking of selling your home, this means that remodeling and making repairs will definitely be a good investment considering the number of younger, inexperienced buyers you will likely have looking at your house.
If the pattern I’m noticing turns out to be true, this will be the first time I’ve seen this pattern in Seattle’s real estate market. The cause of this could be simply that single family homes have been driven from affordability by the bulk of Seattle’s buyers resulting in buyers shifting to smaller, more affordable units.