So, the more your home appreciates, the more money you have in home equity as part of your net worth.
What drives home appreciation?
Home appreciation is based on local market dynamics. You really can’t compare home appreciation in different areas because so many things contribute to an area appreciating, most importantly, how desirable the location is. As with any asset, supply and demand are the big drivers of value. How much a home changes in value over time is it’s appreciation.
Home appreciation rate is hyperlocal
Your uncle in Wisconsin may see his home appreciate 1% a year while your Seattle condo appreciates 5% a year. But, appreciation doesn’t just differ on a state by state basis or city by city basis but a street by street basis in some cases!
Appreciation depends on property type
And, not only is appreciation hyperlocal, but it also is very dependent on the type of property that you have. Multi-million dollar homes have a different customer than studio apartments, for example, and the rates of appreciation are different.
Often, you’ll hear about one end of the market going “soft” but not the other. Different properties attract people with different needs so supply and demand are not the same.
How to tell what your home appreciation is?
Do you love data? I love data. Let’s find housing appreciation data for you.
Because home sale data is public, there are many sources of historical home sale data. But, many of them are in large spreadsheets and difficult to sort through. And, because you really need to search hyperlocal area plus property type, you need to have tools to filter the data to what is similar to your property.
I recommend you use Redfin to do this analysis. I’ll list many other sources of data below, but Redfin compiles house sale data in a way that you can zoom in on specific areas and also filter by property types.
Using Redfin to look at hyperlocal, similar property appreciation
1. Go to www.redfin.com