Seller’s are still realizing nice gains when selling

by Coldwell Banker Evergreen Olympic Realty, Inc. on November 4, 2008

With all the reports of declining home prices, it would seem that every seller is under water. To be sure, there are a number of sellers who are selling for less than they paid. However, in our market the vast majority of sellers are achieving very healthy returns.

In our recently updated report of repeat home sales, where we track the gains or losses of the home’s value from the time purchased to the recent sale, we found that people in their homes less than three years were selling on average 4 percent less than purchased. This group represented just 23 percent of all sales, and half of these sales were bank-owned properties.

That means the remaining 77 percent of all sellers were making money on their sales. In fact, they were making returns right in line with our market’s historical average annual gains of 5.9 percent. Below is a chart of the average appreciation for each class based on length of homeownership*:
· 3 Years 14 percent· 4 Years 31 percent· 5 Years 54 percent· 6 Years 56 percent· 7 Years 71 percent· 8 Years 78 percent· 9 Years 74 percent· 10+ Years 87 percent

One of the more interesting facts of this study is that it confirms an old adage of real estate that suggests one must be in a home for 3 threes before the investment starts to pay dividends. That experience sort of went out the window during the hot seller’s market of from 2003 through 2006. In most cases it is now back in force.

So while prices have undergone, and in some segments will continue to undergo some needed adjustments, the good news for sellers is that the investment is still paying off nicely.

* Repeat Home Sales Report, Homes Sold in Thurston County during August and September of 2008. NWMLS Sales only, analysis by Coldwell Banker Evergreen Olympic Realty. Statistics not compiled by NWMLS. For more details, contact one of our sales professionals.

Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.

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