I had the pleasure of presenting to a group of colleagues from two of our local Boards of REALTORS® this week, and there was much discussion on activity and value both current and historic in our markets.
As I’m sure most of you are aware, I keep a close eye on statistics and provide year over year reports monthly. Why do I do this? Because it’s very important to know what’s going on in our local real estate market as it’s a major driver to our national, state, local and personal economy. Did you know the real estate industry accounted for nearly 17% of the US GDP in 2022? (For my fellow economy geeks, here’s more info on that.) Did you know, that for every home sold, 2.5 jobs are created locally? On a more personal level, did you know the average net wealth of a homeowner is 40x higher than someone who rents? Want to know why? Here’s a great article that breaks it down for you. Those are pretty big numbers, but what does it mean for you?
If you saw my video on the year end market statistics comparing 2022 to 2021, you’ll recall I talked about the average annual appreciation rate over a five-year period being 5.9% in Monongalia County. (Wait, what? You didn’t see it? Well, you can fix that by clicking here and watching it on our YouTube channel.) That is a little elevated due to the Covid market, but not by much. Typically, we’re between 4 and 5% in this market. And note, that’s a per year appreciation, not a span of five years. So, here’s a flow chart as an example, and I’ll go with a 5% rate to be conservative:
2018 Home Purchased $250,000
2019 Est. Appreciated Value $262,500
2020 Est. Appreciated Value $275,625
2021 Est. Appreciated Value $289,406
2022 Est. Appreciated Value $303,876
Total Est. Equity at 5 years $53,876
That’s a lot of wealth growth just by living in your home and paying the mortgage, don’t you think?
This is why I strongly feel the information I provide is worth providing. So you, the consumer, can have a better idea of what this part of your portfolio looks like. So the general public can better understand what’s driving our economy and how they may be able to participate in their own wealth building. So our industry partners such as lenders, attorneys, developers, etc. have real time information about the pulse of our county.
I hope this has brought some clarity, and maybe even curiosity, into the importance of our housing market. If you are wondering what your current equity may be, we are happy to do a no-strings-attached valuation for you. If you are currently renting and are curious what your buying power may be, we are happy to have a conversation with you and connect you with a few of our lender partners as well. After all, the best time to buy a house was three years ago, Buy the second best time to buy is now….
Take care and stay warm! Please feel free to reach out to us with any questions or real estate needs at 304-241-7500 or firstname.lastname@example.org.